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Midterm

URBS 240 Midterm: Urbs 380 Midterm study guide 2017

8 Pages
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Department
Urban Studies
Course Code
URBS 240
Professor
norma rantisi

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URBS 380 Midterm Study Guide:
For multiple choice, true/false questions and short answer, you may be asked about
the following concepts or issues:
Know the key neo-classical assumptions about markets (as discussed in class)
Some key neoclassical assumptions:
i. fully-informed, rational actors (producers, users)
ii. constant returns to scale (in production)à increase in outputs
proportional to increase in inputs
iii. isotropic plane
What is overlooked:
Geographic unevenness - how the properties of places can shape their
economic evolution
Limits to neoclassical assumptions:
Increasing Returns to Scale (‘scale economies’):
increase in outputs is greater than increase in inputs
Know the three different kinds of agglomeration economies what is the difference
between them? Which one is significant for innovation?
agglomeration economies (localization, urbanization & activity-complex)
Localization Economies: benefits that arise from spatial concentration of firms in the
same industry.
i) shared intermediate inputs
ii) labour pooling
iii) knowledge spillovers
Urbanization Economies: benefits that arise from spatial concentration of a diversity of
industries
iv) shared intermediate inputs
v) diversified labour pool
vi) exposure to different ways of doing things
Diseconomies of scale –increase in outputs is less than increase in inputs.
1/2
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Human capital: practical knowledge, acquired skills and learned abilities of that make an
individual potentially productive and enhances their value in the marketplace.
Comparative advantage
- determines which industry serves as ‘export’ base
- definition: the ability of a party to produce at
lower ‘opportunity cost’ than a competitor
- differs from ‘absolute advantage’: the ability of
a party to produce more than a competitor.
Know the three assumptions that inform the ‘monocentric city’ perspective (refer to
Kloosterman & Musterd article). Kloosterman, R.C. & Musterd, S. (2001). The Polycentric Urban
Region: Towards a Research Agenda. Urban Studies , 38, pp. 623-633.
Four key assumptions:
central export node (railroad terminal or port)
horse-drawn wagon
hub-and-spoke streetcar system
agglomeration economies
As a supply-side strategy for influencing the location choices of firms, tax policy is used
to address what kind of costs? Do taxes influence location decisions?
Tax Policies
- tax subsidies (‘grant’)
- tax abatements (reduction in tax)
Tax policies - most popular BUT not influential for choice of region
Why? Processing costs not so significant.
‘Staples’ theory vs. 'economic base’ theory – each reflects an export-oriented approach
but know the difference between them
2/2
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If provided with the location quotients, know how to differentiate between non-base and
base industries
If LQ > 1, then industry is ‘base’
If LQ < 1 or = 1, then industry is ‘non-base’
If provided with data, know how to calculate a multiplier effect (know the formula!) &
know what the number represents.
Multiplier Effect = Non-Base Employment/Base Employment
The multiplier effect represents how many non-base workers are employed by
the income of base workers. Every base worker creates income that is then
spent in the local economy to employ 2.305 non base workers.
Multiplier Effect = Base Multiplier – 1.
Know what a ‘leakage’ is (as discussed in class and in the Loxley and Lamb reading), and
what effect it has on the multiplier. Loxley, J. and Lamb, L. (2007) “Export Base Approach” In
J. Loxley, J. Silver & K. Sexsmith (Eds). Doing Community Economic Development (pp. 199-
201). Manitoba: Fernwood Publishing.
‘Leakage’ = loss of potential spending on local activities, due to imports or money saved => lower
multiplier
Within the shift-share approach, what does the ‘shift term’ represent?
‘shift term’ captures observed difference between local and benchmark growth rates.
Shift-share assumes that ‘shift’ term remains constant. i.e. local advantage (or
disadvantage) in one period will continue in a future period.
Know the key assumption of the early version of ‘location theory
Builds on Weber (1909) industrial location theory
(focus on transport costs; weight and distance factors)
- heavy raw material -> locate at source of material
- light material index -> locate at market
If significant, labour costs can also affect location
3/2
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Description
URBS 380 Midterm Study Guide: For multiple choice, true/false questions and short answer, you may be asked about the following concepts or issues: Know the key neo-classical assumptions about markets (as discussed in class) Some key neoclassical assumptions: i. fully-informed, rational actors (producers, users) ii. constant returns to scale (in production) increase in outputs proportional to increase in inputs iii. isotropic plane What is overlooked: Geographic unevenness - how the properties of places can shape their economic evolution Limits to neoclassical assumptions: Increasing Returns to Scale (scale economies): increase in outputs is greater than increase in inputs Know the three different kinds of agglomeration economies what is the difference between them? Which one is significant for innovation? agglomeration economies (localization, urbanization & activity-complex) Localization Economies: benefits that arise from spatial concentration of firms in the same industry. i) shared intermediate inputs ii) labour pooling iii) knowledge spillovers Urbanization Economies: benefits that arise from spatial concentration of a diversity of industries iv) shared intermediate inputs v) diversified labour pool vi) exposure to different ways of doing things Diseconomies of scale increase in outputs is less than increase in inputs. 1/2 Human capital: practical knowledge, acquired skills and learned abilities of that make an individual potentially productive and enhances their value in the marketplace. Comparative advantage - determines which industry serves as export base - definition: the ability of a party to produce at lower opportunity cost than a competitor - differs from absolute advantage: the ability of a party to produce more than a competitor. Know the three assumptions that inform the monocentric city perspective (refer to Kloosterman & Musterd article). Kloosterman, R.C. & Musterd, S. (2001). The Polycentric Urban Region: Towards a Research Agenda. Urban Studies, 38, pp. 623-633. Four key assumptions: central export node (railroad terminal or port) horse-drawn wagon hub-and-spoke streetcar system agglomeration economies As a supply-side strategy for influencing the location choices of firms, tax policy is used to address what kind of costs? Do taxes influence location decisions? Tax Policies - tax subsidies (grant) - tax abatements (reduction in tax) Tax policies - most popular BUT not influential for choice of region Why? Processing costs not so significant. Staples theory vs. 'economic base theory each reflects an export-oriented approach but know the difference between them 2/2If provided with the location quotients, know how to differentiate between non-base and base industries If LQ > 1, then industry is base If LQ < 1 or = 1, then industry is non-base If provided with data, know how to calculate a multiplier effect (know the formula!) & know what the number represents. Multiplier Effect = Non-Base Employment/Base Employment The multiplier effect represents how many non-base workers are employed by the income of base workers. Every base worker creates income that is then spent in the local economy to employ 2.305 non base workers. Multiplier Effect = Base Multiplier 1. Know what a leakage is (as discussed in class and in the Loxley and Lamb reading), and what effect it has on the multiplier.Loxley, J. and Lamb, L. (2007) Export Base Approach In J. Loxley, J. Silver & K. Sexsmith (Eds). Doing Community Economic Development (pp. 19
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