Question 1.1

Which of the following is not a condition required for an equilibrium in neighborhood choice:

1. every household in a particular neighborhood pays equal rent.
2. no incentive for any resident to relocate to the other neighborhood.
3. Neighborhood contains a mix of blue and green neighbors.
4. all residents are accommodated.

Answer: [a / b / c / d]

Question 1.9 (8 points)

Following our model on urban labor market, indicate the relationship for each pair of variables:[positive / negative / no effect / ambiguous]

Parameter	Choice Variable	Relationship
Demand for export good	Wage
Demand for export good	Total employment
Carbon tax	Wage
Carbon tax	Total employment