ECON 155 Lecture Notes - Lecture 7: Knowledge Spillover
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Single transferable input and single output a. b. If it is a weight losing output it will always locate at the raw material source. Economies of scale in just production and exchange. Trading cities are important, not just about production. Larger labor market, more firms and more worker skills. Inefficient city with small firms constantly changing the products they make and nev of scale. More likely to cite patents whose owners are the same city. Large concentration of workers in the same field. Why are cities different sizes (ch 4 textbook) City rows to the extent it is an attractive location for industries. Good for industries and jobs in proportion to industry size. Doesn"t have to do as much with geography. City grows to extent it produces things that serves a rural hinterland. Two answers intersect and investments that favors the first may also favor second. Agglomeration ecoomies reduce supplier costs but lets assume the costs also rise.