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Question 3.3 Suppose now that workers can move between cities (internal migration) but face moving costs of $2. Individuals expect to live 10 years, face

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Question 3.3 Suppose now that workers can move between cities (internal migration) but face moving costs of $2. Individuals expect to live 10 years, face an interest rate of 0% per year. Do workers want to move from Miami to Atlanta? Do workers want to move from Atlanta to Miami? HINT: compute the present value of income of a worker living in Atlanta and a worker living in Miami, and compute the net gain from moving. I Question 3.4 Suppose 5 workers move from Miami to Atlanta. What will be the wage in these two cities after this internal migration? Is the wage difference between Atlanta and Miami bigger or smaller than before internal migration? l

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