Regional Economics

5. [Roback Model] Consider a Roback model with higher amenities in region 2 and lower amenities in region 1. Workers consume housing/land and other goods. Workers value amenities. Firms use labor and land in production. Firms are indifferent to amenities. a. Draw a figure b. Define the nominal wage, real wage and real-real wage. c. Which region has the higher nominal wage? Why? d. Which region has the higher real wage? Why? c. Which region has the higher real-real wage? Why? 5. [Roback Model] Consider a Roback model with higher amenities in region 2 and lower amenities in region 1. Workers consume housing/land and other goods. Workers value amenities. Firms use labor and land in production. Firms are indifferent to amenities. a. Draw a figure b. Define the nominal wage, real wage and real-real wage. c. Which region has the higher nominal wage? Why? d. Which region has the higher real wage? Why? c. Which region has the higher real-real wage? Why