Question: 1. 1. 5 Neighboring countries often differ in the level of the basic income exempted from taxation. Sometimes national regulations and international agreements allow cross-border

1. 1. 5 Neighboring countries often differ in the level of the basic income exempted from taxation. Sometimes national regulations and international agreements allow cross-border commuters to exploit these dif ferences. Show the effect these have on the equilib rium wage and employment in cities on either side of the border. (Hint: See Solved Problem 10.1.)

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