Question: There are two cities, Springfield and Eugene, and 100 identical workers who can choose to live in either city. Suppose the indirect utility of

There are two cities, Springfield and Eugene, and 100 identical workers who

There are two cities, Springfield and Eugene, and 100 identical workers who can choose to live in either city. Suppose the indirect utility of living in either city is given by: V=W;-R; + Mj Where W; is the wage of living in either city j and R; is the rent in city j. Wages in Eugene are $100 and wages in Springfield are $160. We also have amenities: ME-60 in Eugene and Ms-40 in Springfield. Rents in Eugene, RE are given by: RE=20+LE, where LE is the number of workers in Eugene, and rents in Springfield, Rs are given by: Rs=30+Ls, where Ls is the number of workers in Springfield. a. How many workers will live in Eugene in spatial equilibrium? (3 points) b. What is landlord profit is Eugene? What are landlord profits in Springfield? (3 points) C. What is total utility? (3 points)

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