Recall our simple model of a city as a trading entity with production of the export good governed by the xed proportions production function: gm = min [5, 5] . (1) Cl!\" 03k The equilibrium was described by the following four equations: than = N (2) E E _ 1!. (N, N) u (3) PL PA _ _ t L = _ 4 N ( > N c ) 6% a pc % = - (5) % PL a. Given the production function, (1), what will be the labour-capital ratio E in a K' equilibrium? b. Briey interpret each of the equations. e. Let an and ak be xed parameters and 11) pm; and pa be determined in the rest of the world and therefore taken as given in the city. What is the importance of the function t(L)? Why is it necessary for it to be increasing in city size, L? d. What do you think will happen to the city if 30;; (this is essentially agricultural land rentthe value of land outside the city) rises? Explain briey