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Consider a regional economy with 12 million workers and an urban utility curveu(n) = 15 + 12n 2n2, where n is the number of workers
Consider a regional economy with 12 million workers and an urban utility curveu(n) = 15 + 12n 2n2, where n is the number of workers in millions. Initiallythe region has four cities (A, B, C, D), each with a population of 3 million.
a. The equilibrium utility level is [_____] utils.
b. Suppose city A introduce carplanes to replace regular cars for commuting,and its urban utility function is u(n) = 15 + 12n n2. Predict the effect ofthe carplane on (i) equilibrium distribution of population between the citiesand (ii) regional utility. Illustrate.
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