Location Theory

Question 1

The Foundation of Planning and other
Economic Theories and
Models

Answer 1

Location Theory

Question 2

is concerned with the geographic location of economic activities

Answer 2

Location Theory

Question 3

it addresses the questions of what economic activities are located
where and why.

Answer 3

Location Theory

Question 4

It rests primarily on the assumption that agents act in their
own self-interest.

Answer 4

Location Theory

Question 5

Early location theory was concerned with agricultural land use, as
modeled by

Answer 5

von Thunen

Question 6

industrial location theory

Answer 6

Alfred Weber

Question 7

seeks to explain the
basic, universal factors that determine
and influence the location of all kinds
of economic activity”

Answer 7

Location theory

Question 8

“just as there are economic laws which determine the life of the economy, so are there special economic-geographic laws determining the arrangement of towns”

Answer 8

Christaller 1932

Question 9

location factors for businesses

Answer 9

-land and its attributes
-labor and management
-capital
-materials and power-organization, behavior and change
-market and price
-transportation and freight rates
-agglomeration, linkage and external economies
-public policy, planning, and the state

Question 10

different types of economic activities

Answer 10

1. primary activities
   
   • agriculture, hunting, fishing
   • mining, resource extraction
2. secondary activities
   
   • manufacturing
   • construction
3. tertiary activities
   
   • retail
   • services
4. quaternary activities
   
   • information technology
   • media
   • research and development
5. quinary activities
   
   • producer activities

Question 11

was an English political economist and
was one of the most influential classical
economists.

Answer 11

David Ricardo (19 April 1772 – 11 September
1823)

Question 12

known for his Differential Rent Theory
based on fertility, but he also gave “situation” as
a possible cause of rent.

Answer 12

David Ricardo

Question 13

the difference between the
produce obtained by the employment of two equal
quantities of capital and labor.

Answer 13

Economic Rent

Question 14

the payment over and above what is necessary
to stay in business

Answer 14

Economic Rent

Question 15

was a prominent nineteenth century
German economist and landowner,

Answer 15

Johann Heinrich von Thunen (24 June 1783 - 22
September 1850)

Question 16

first volume of treatise, developed the first serious treatment of
spatial economics, connecting it with the theory of rent first developed by David Ricardo

Answer 16

The Isolated State
(1826)

Question 17

That is, von Thunen
took the Ricardian notion of rent one step further
by introducing _________ and ________

Answer 17

distance and space

Question 18

He is
sometimes referred to as the father of location
theorists.

Answer 18

Johann Heinrich von Thunen

Question 19

Postulates that transport cost depends on the
distance from the market and different kinds of
products. The gain from farming per unit area
(locational rent) decreases with increasing
distance from the market.

Answer 19

Johann Heinrich von Thunen

Question 20

Coined the term Location rent (land value)

Answer 20

Johann Heinrich von Thunen

Question 21

economic rent minus the costs
associated with transporting products to market.

Answer 21

Location rent (land value)

Question 22

gave a predictive model of rural development
around an idealized isolated urban center, imposing several
simplifications to focus on some of the fundamental
processes at work in settlement patterns and rural economic
activity.

Answer 22

Johann Heinrich von Thunen

Question 23

was
a German economist, sociologist, and
theoretician of a culture whose work was
influential in the development of modern
economic geography.

Answer 23

Alfred Weber (30 July 1868 – 2 May 1958)

Question 24

He is the author of the
Theory of the Location of Industries, studied
industrial location decisions, and built on von
Thunen’s theory by considering not only the costs
of getting goods to market but also the costs of
transporting material inputs to the manufacturing
plant.

Answer 24

Alfred Weber (30 July 1868 – 2 May 1958)

Question 25

Consider transportation cost as the direct function of the item's weight and distance shipped.

Answer 25

Alfred Weber

Question 26

He asserted that “all else being equal, manufacturers will locate their plants either at the market or the source of the input depending on whether or not the final. The product gains weight or loses weight in the manufacturing process”.

Answer 26

Alfred Weber

Question 27

formulated a theory of industrial location in which an industry is located where the transportation costs of raw materials and the final product are at a minimum (least-cost location).

Answer 27

Alfred Weber

Question 28

He gave two special cases of finding the least-cost location

Answer 28

Alfred Weber

Question 29

The weight of the final product is less than the weight of the raw material going into making the product.

Answer 29

Weber’s Weight-Losing Case

Question 30

The final product is heavier than the raw materials that requires transport

Answer 30

Weber’s Weight-Gaining Case

Question 31

established that firms producing goods less bulky than the raw materials used in their production would settle near the raw-material source. Firms producing heavier goods would settle near their market. The firm minimizes the weight it has to transport and, thus, its transport costs.

Answer 31

Alfred Weber

Question 32

Extended the von Thunen model to urban land uses.

Answer 32

William Alonso

Question 33

His model gives land use, rent, the intensity of land use, population, and employment as a function of distance to the CBD of the city as a solution of an economic equilibrium for the market for space.

Answer 33

William Alonso

Question 34

He postulated that there is an inverse relationship between transportation cost and rent such that if transportation cost is high, then the rent is low.

Answer 34

William Alonso

Question 35

He developed the "Bid-Price Curve":

Answer 35

William Alonso

Question 36

A set of combinations of land prices and distances among which the individual is indifferent (i.e. satisfied with the combination of land price as well as the distance at some point).

Answer 36

Bid-Price Curve

Question 37

a line that indicates how much a person is prepared to pay for a unit of land at varying distances from the market/ the city center.

Answer 37

Bid-Price Curve

Question 38

-Wages are higher in the center

Answer 38

cost

Question 39

-Local demand for labor is more significant than local supply.

Answer 39

cost

Question 40

-Decentralized shopping centers are being developed following road improvement and increased car ownership.

Answer 40

cost

Question 41

-Modern manufacturing industry relies increasingly on heavy road vehicles for long-distance transportation and incurs lower transport costs on the fringes of cities than at more central locations.

Answer 41

cost

Question 42

-Retailing revenue is determined by the size of the shopping catchment area or hinterland, not just in terms of population but in terms of purchasing power.

Answer 42

revenue

Question 43

-In the case of offices, the spatial distribution, number, and size of the client establishments determine revenue.

Answer 43

revenue

Question 44

-Revenue is thus greatest within the CBD and so are the aggregate costs.

Answer 44

revenue

Question 45

-To maximize profits, firms need to locate where they can benefit from both the greatest revenue and the lowest costs.

Answer 45

profitability

Question 46

-Specialized functions and activities serving the urban market will locate centrally

Answer 46

profitability

Question 47

-Firms requiring large sites and those attempting to reduce costs of overconcentration will be attracted to the suburbs.

Answer 47

profitability

Question 48

-Firms located close together to benefit from complementary will incur lower costs because of external economies and enjoy higher revenue due to joint demand.

Answer 48

profitability

Question 49

as _______ largely decides the profitability or utility of goods and services, it subsequently determines the location of activity and the spatial structure of the urban area supplying these goods and services.

Answer 49

price mechanism

Question 50

__________within the CBD are reflected in low transport costs attracting the greatest demand for commercial sites.

Answer 50

high levels of accessibility

Question 51

other possible influences

Answer 51

-changes in population, technology, and transportation -pressures from redeveloped central areas -local and central government policy.

Question 52

Analyzes the size distribution and firm composition of cities.

Answer 52

Walter Christaller

Question 53

A geographical that seeks to explain the number, size, and location of human settlements in an urban system.

Answer 53

Walter Christaller

Question 54

Settlements simply function as ‘central places’ providing services to surrounding areas.

Answer 54

Walter Christaller

Question 55

created the central place theory

Answer 55

Walter Christaller

Question 56

extends the idea to the case where there is a hierarchy of cities as well as a distinction between urban and rural areas.

Answer 56

Central Place Theory

Question 57

is based on the idea that different types of firms have different market areas and that cities are composed of these firms. -A market area is the area over which a firm can underprice its competitors. -Size depends on the relative production costs of firms, the cost of transportation, and the level of demand.

Answer 57

Central Place Theory

Question 58

is a settlement that provides one or more services for the population living around it.

Answer 58

Central Place

Question 59

Simple basic services, i.e. food, and household items (things that replenish frequently) are said to be low order

Answer 59

Central Place Theory

Question 60

Specialized services (e.g. computers, universities) are said to be of a high order.

Answer 60

Central Place Theory

Question 61

Having a high-order service implies there are low-order services around it, but not vice versa.

Answer 61

Central Place Theory

Question 62

Settlements that provide low-order services are said to be loworder settlements. Settlements that provide high-order services are said to be high-order settlements.

Answer 62

Central Place Theory

Question 63

The minimum population size required to profitably maintain a service is the threshold population.

Answer 63

Central Place Theory

Question 64

The theory consists of two basic concepts: 1. Threshold 2. Range

Answer 64

Central Place Theory

Question 65

the minimum market needed to bring a firm or city selling goods and services into existence and to keep it in business.

Answer 65

Threshold

Question 66

the average maximum distance people will travel to purchase goods and services.

Answer 66

Range

Question 67

The larger the settlements, the fewer their number

Answer 67

Central Place Theory

Question 67

The larger a settlement, the farther away a similar size of the settlement is.

Answer 67

Central Place Theory

Question 68

The Range increases as the population increases.

Answer 68

Central Place Theory

Question 69

Improved Weber’s theory by introducing the demand factor.

Answer 69

August Losch

Question 70

He assumed that manufacturers are driven to maximize profit by locating at the place that maximizes the difference between revenues and costs.

Answer 70

August Losch

Question 71

He went on to assert, however, that it is impossible for a firm to evaluate all possible points in order to find “the place of greatest money profit.”

Answer 71

August Losch

Question 72

That is, “selection of a manufacturing site from among alternative locations can be viewed as substituting expenditures among the various production factors such that the best site is chosen.”

Answer 72

Walter Isard

Question 73

Further developed the isotropic sphere by introducing the concept of substitution into a general synthesis of the works of Von Thunen, Weber, and Isard.

Answer 73

Walter Isard

Question 74

Introduced a behavioral matrix in which the quantity and quality of information available to a decision maker are graphed on the y-axis and their ability to use information is graphed on the x-axis.

Answer 74

Allen Pred

Question 75

In this matrix, the perfect location decision would be found at the intersection of perfect knowledge and the ability to use that knowledge.

Answer 75

behavioral matrix

Question 76

created The Impact on Uncertainty of Location

Answer 76

David Smith

Question 77

Primarily concerned with adding more complexity to the isotropic sphere by introducing the uncertainty principle, which effectively dismisses the assumptions of perfect knowledge of alternatives and complete information.

Answer 77

The Impact on Uncertainty of Location,