Suppose the main employment center (CBD) is located at an x1 (in miles round trip) distance from a household's location and there is a sub employment center (SBD) in between. The distance between the main employment center (CBD) and the sub employment center (SBD) is x2 (in miles round trip).

x1 (round trip) is 30 miles and x2 (round trip) is 15 miles. Transportation cost per mile is $1 (including opportunity cost of travel) and per week income (Y1) at the main employment center (CBD) is $800. Irrespective of the employment location, household will work for 5 days per week.

1. Calculate the disposable income (per week) of the household, if he/she commutes to the main employment center (CBD).
2. For the household to be indifferent about employment location, how much of an income (Y2) the household should be receiving at the sub employment center?
3. Calculate the disposable income of the household if he/she commutes to the sub employment center, given the income Y2 you calculated above. Is this disposable income equal to the disposable income you calculated in a?