URBAN ECONOMICS

Study Guide I

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Chapter 3

1.  What are the reasons for economies of scale in transportation?

2.  How do trading cities develop?

3.  How do industrial cities develop?

4.  Show grpahically how the market area of a factory is determined.

5. Show graphically how innovations such as interchangeable parts, the assembly line, and inventions in specific industries affected the market area served by factories. How did this in turn affect the size of factories and urban areas?

6.  Show graphically how innovations in intercity transportation such as canals and the railroad affected the market area served by factories. How did this in turn affect the size of factories and urban areas?

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Chapter 4

1.  What is the difference between localization economies and urbanization economies?

2.  How does sharing intermediate inputs lead to agglomeration economies?

3.  How does tapping a common labor pool lead to agglomeration economies?

4.  How do knowledge spillovers lead to agglomeration economies?

5.  Show graphically the impact of agglomeration economies in marketing (shopping externalities).

6.  What are the benefits of urban size in terms of joint labor supply, learning opportunities, and social opportunities?

7.  Show graphically and explain why the equilibrium number of firms in a cluster is higher than the efficient number.

8.  What is the trend in terms of the location of managerial functions vs. the location of production?

9.  What are nursery cities and what role do they play in the product development and production cycle?

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Chapter 5

1. How is the total transportation cost for a firm calculated?

2. How is the monetary weight calculated?

3. Under what conditions would firms be resource-oriented? Show graphically and mathematically why these types of firms locate where they do.

4. Under what conditions would firms be market-oriented? Show graphically and mathematically why these types of firms locate where they do.

5. Know how the Principle of Median Location is used to determine the local of firms in the case of multiple markets and transshipment points.

6.  How do labor costs, energy technology, agglomeration economies, and human capital affect the location of firms?

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Chapter 6

1.  What is the relationship between per capita demand for a product and size of cities where the product is sold?

2. How does the relationship between scale economies and per capita demand affect the size and number of firms?

3. How does central place theory explain the development of cities of different sizes?

4. How does the existence of imperfect substitutes and complements affect the hierarchical pattern of cities?

5. How does variation in demand, the existence of resource-oriented firms, and the existence of local input-oriented firms affect the hierarchical pattern of cities?

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Chapter 7

1.  Show graphically and explain the relationship between utility and city size.

2.  Show graphically and explain why cities are not too small in a regional equilibrium.

3.  Show graphically and explain why cities may be too large in a regional equilibrium.

4.  Know the conditions under which an efficient configurations of cities is stable.

5.  Show graphically and explain how differences in agglomeration economies will lead to differences in city size in a regional equilibrium.

6.  Know how to apply the rank size rule.

7.  What are the sources of economic growth and higher per-capita incomes?

8.  Show graphically technological progress in one city can affect a whole system of cities in a region.

9.  What is the role of human capital in economic growth?