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ceruleantermite287Lv1

28 Sep 2019

Urban economics

Briefly explain the terms below:

- Benefits and costs of clustering

- Returns to scale

- Factory Cities and market mechanisms

- Where to locate in the city

o Near market

o Near input source

- Median location principle

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Joshua StredderLv10

28 Sep 2019

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Related questions

A) If the average unskilled worker earns $8 per hour in the country and the cost of living is 25% higher in the city, the average unskilled urban worker must earn _____ in location equilibrium.

B) Assume household A and household B produce oranges and apples in an economy with no transaction costs. If household A specializes it can produce 4 oranges or 8 apples, and household B can produce 2 oranges or 2 apples.

What is the opportunity cost in terms of apples of household A to produce one 1 orange?

A. 2 apples

B. 2/3 apples

C. 1 apples

D. 3 apples

C) What is the opportunity cost in terms of oranges of household A to produce 1 apple?

A. 1 orange

B. 1/2 orange

C. 4 oranges

D. 2 oranges

D) When a factory uses indivisible inputs (machines) to allow workers to specialize in a narrowly defined task, leading to higher output per worker and lower average cost, this is an example of?

A. economies of scale

B. constant returns to scale

C. marginal propensity to consume

D. zero economic profit

magentahyena635

True/False (Explain) (The explanation is the most important part no credit will be given for True/False answer alone)

1)There are very large numbers of restaurants in major cities such as Los Angeles and very large numbers of restaurant customers, so it is appropriate to use the supply and demand model to analyze the market for restaurants in this sort of city.

2) A particular firm has decreasing returns to scale at all levels of output. If it was divided into two smaller firms that each uses exactly half the amount of all inputs compared to the original firm, and prices remained constant, the combined profits of the two smaller firms would be greater than the profit of the original firm.

3) Competitive firms always earn zero profits because their marginal cost is equal to their marginal revenue at the optimal level of production.

4) An increase in the price of an input used by a firm leads to higher costs and lower profit at the original quantity produced; therefore, it should respond by increasing its quantity produced so that its revenue will increase.

mauvespider910

A cost-minimizing firm has the following short-run production function:
Q=f (L,K)=72L+5L²-0.2L³

a) Briefly explain why this is a short-run production function.

b) At what level of employment would be diminishing returns set in for the variable input?

c) Fin the levels of employment that define stage two in the production process.

d)If the market-determined real wage rate is $20 determine the amount of labor a cost-minimizing firm would hire in order to minimize the total cost of production.

2) a) Briefly explain the concept of "Return to scale". What form of "Return toScale" does the following production function exhibit? Explain

b) Q=f(L,K)=L^0.3 K^0.7

Suppose a cost-minimizing firm wishes to change its scale of production and needs to know the combination of labor and capital to employ. If the first's total cost outlay is $14. Fin this combination using the information below and given that the prices of labor and capita are $1 and $3 per unit respectively.

Q= 0 1 2 3 4 5 6 7 8

TPI=0 11 20 28 35 41 45 46 46.5

TPK=0 24 45 63 78 87 93 96 97

where TPI AND TPK represent the total product of labor and total product of capital respectively.

3) Given the demand and supply schedules for semiconductors in a perfectly competitive market:

Q_d=60-10P+0.5I, Q_s=-10+4P-2C

Where I=average income of the demanders of this production

C=unit cost of the inputs used in the production of this commodity.

a) Find the expression for equilibrium price and equilibrium quantity transcended in this market.

b)Find the initial equilibrium and equilibrium quantity ifI=1000 and C=20

c) Determine the impact of an increase in income from 1000 to1200 on the initial equilibrium values.

d) Assume that an improvement in the technology of producing this commodity results in an increase in supply by a factor of 5, how will this development affect the initial equilibrium values?0