ECON483 Lecture 1: Lecture 1
Document Summary
Lecture 1 (jan. 3) introduction and historical survey (brueckner ch. 1) Introduction: economic explanations for the existence of cities focus on jobs and the location of employment. Economists argue that certain economic forces cause employment to be concentrated in space. Concentrations of jobs lead to concentrations of residences as people locate near their worksites. This chapter explains several different ways in which transportation costs affect the formation of cities. Scale economics: in order to generate such a metropolis, many firms must locate together in close proximity. For this outcome to occur, agglomeration economies must be present. 1. 3 agglomeration economies: simply stated, pecuniary economies make some inputs cheaper in large cities than in small ones, while technological economies make inputs more productive in large cities than in small ones. 1. 3. 2 technological agglomeration economies: technological agglomeration economies appear to operate more strongly within industries than across industries. The interaction of scale economies and transportation costs in the.
