Question

1. An economic city is defined as ... a. The central city. b. A place with spatially concentrated economic activity and relatively high population density. C. A location with access to international transportation networks. d. The seat of government in a geographic area. 2. A firm will choose a market-oriented location when ... a. It is more costly to transport inputs than outputs. b. It is more costly to transport workers than output. c. It is more costly to transport inputs than workers. d. It is more costly to transport output than inputs. 3. Suppose the wage offered by an isolated firm is $81 and there is a 40 percent chance of being fired. The switching cost is $32 and the utility function is u(w) =W2. The expected utility for a job with the isolated firm is and the certainty equivalent of a job in the isolated site is __? a. 8.2, 67.2 b. 7.8, 60.8 c. 10, 100 d. 7, 49 4. In the last several decades, large cities have become increasingly specialized in production, while smaller cities have become more specialized in management. a. True b. False 5. Consider a region with two cities and a total workforce 162 = A+B, where A is the workforce in city 1 and B is the workforce in city 2. For the negatively sloped portion of the utility curves, u(A) = 432/A and u(B) = 216/B. What are the values for the workforces of the two cities and the regional utility? a. A=206, B=108 b. A=7, B-4 C. A= 108, B = 54 d. A=40, B = 26 6. Employment subcenters have eliminated the importance of central cities in modern urban areas. a. True b. False.

Answer 1

1> B

An economic city is where a lot of economic activities happen and it happens to be the case that the population density is higher in those area.

2> d

A market-oriented approach is where the customers are given the central focus. Thus, it must be the case that the cost of transport of the outputd are higher than other costs.

3> a

Expected Utility is 0.6x(root(81)+0.4x(root(81-32)[the first case is when he is not fired.

=8.2

And the certainty equivalent would be 8.2^2=67.2

4> False

It is the opposite, production generally happens at smaller cities and management, headquarters are at big cities.