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The three main settings in the story are East Egg, West Egg, and the valley of ashes. East Egg is where Daisy and Tom Buchanan live. It's where the people live who've had money for generations. They are elitist and self-centered people who, as Nick notes, "... smashed up things and creatures and then retreat back into their money or their vast carelessness".
West Egg is where Nick Carroway and Jay Gatsby lived. The people on West Egg are generally rich, but they are first generation rich so they are a little rough around the edges, like Jay. They've earned their money. Nick, being the humble person that he is, doesn't live in a mansion like Jay does. He lives in a small caretaker's cottage befitting his character. Jay's mansion, like Jay, is somewhat garish. Jay likes to show people his "bling" thinking that it impresses people. It only impresses people who have less than he does.
The valley of ashes is where Myrtle and George Wilson live and it is the poor part of the area. It's where people live lives as gray as the landscape. Fitzgerald wants the reader to see that lives are burned up there and wasted just like fire burns things and leaves only gray, useless ash in its wake. The other setting that is mentioned, but isn't as important, is New York City. Life is lively and anonymous there. That's why Tom and Myrtle keep their apartment there and why Jay reveals his and Daisy's affair to Tom there.
The novel's main characters are Jay Gatsby, a rich young man who has made his money through illegal means. Tom and Daisy Buchanan, who are married and the parents of a little daughter, live lives of great wealth and social privilege. Nick Carraway has come home from World War I and moved to the East to begin a financial career in New York. He becomes Gatsby's only friend. George and Myrtle Wilson are another married couple in the novel, but their lives are much different from those of Tom and Daisy.
Go to the eNotes links below for detailed information about these characters, where and how they live, and what their lives mean within the novel.
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