Quiz 1

Question 1

What are the 3 reasons LU is a special subsection of economics?

Answer 1

• externalities
• immobile
• heterogenous

Question 2

What are the 5 determinants of LU and LUC?

Answer 2

• environmental
• neighbours
• policy
• socio-economic
• technology

Question 3

What are 2 socio-economic factors affecting LU and LUC?

Answer 3

• population
• roads

Question 4

What are some environmental factors surrounding LU and LUC?

Answer 4

• temperature (min, max, average)
• precipitation

Question 5

What are 3 reasons population density matters?

Answer 5

• demand for land
• policy
• urban sprawl

Question 6

What does LUC mean?

Answer 6

Land Use Change

Question 7

What does LU mean?

Answer 7

Land Use

Question 8

What is the von Thunen theory?

Answer 8

Commodities with higher unit returns and transportation costs will be produced closer to the market.

Question 9

What is von Thunen rent?

Answer 9

“created by spatial variation or location of a resource”

Question 10

What are the von Thunen rings?

Answer 10

Question 11

What are the 7 von Thunen assumptions?

Answer 11

• Constant t
• Flat
• Homogenous
• Isolated
• Monocentric
• No substitution
• Wilderness

Question 12

Why is one of the von Thunen assumptions that the market is surrounded by wilderness?

Answer 12

So that new agricultural land can be cleared as demand increases.

Question 13

What is the most problematic von Thunen assumption, and what did it mean for urban economics?

Answer 13

Homogenous (ignores soil quality)

Works fine for urban.

Question 14

Why is one of the von Thunen assumptions that there’s fixed inputs with no substitution?

Answer 14

Model won’t hold up with substitution.

Question 15

What is the equation for von Thunen’s theory?

Answer 15

profit = pm-iK-rS-mtd

Question 16

How do we find the maximum rent a farmer would be willing to pay with von Thunen?

Answer 16

Set profit to zero, solve for r.

Question 17

How do we find the outer limit of the farming area with von Thunen?

Answer 17

Set r to 0, solve for d.

Question 18

What is p in the von Thunen model?

Answer 18

p = price per unit of output

Question 19

What is m in the von Thunen model?

Answer 19

marketable output in units

Question 20

What is i in the von Thunen model?

Answer 20

i = input cost per unit of input

Question 21

What is K in the von Thunen model?

Answer 21

K = units of composite capital input

Question 22

What is r in the von Thunen model?

Answer 22

r = rent per land unit (i.e. acre, ha)

Question 23

What is S in the von Thunen model?

Answer 23

S = size of land input

Question 24

What is t in the von Thunen model?

Answer 24

t = transportation rate per unit of output, per unit of distance

Question 25

What is *d* in the von Thunen model?

Answer 25

d = haulage distance

Question 26

How do we find C?

Answer 26

Set the two equations equal to one another and solve for d.

Question 27

What is von Thunen rent?

Answer 27

Economic rent created by spatial variation or the location of a resource.

Question 28

What effect will better roads have on WTP rent, and the bid-rent line?

Answer 28

This changes the slope of the rent curve. The maximum rent they are willing to pay doesn't change. The distance away from town they can afford to be does increase though.

Question 29

What will happen to the bid-rent curves if apple farmers are always willing to pay more than strawberry farmers?

Answer 29

Then there will be no strawberry farms, as the strawberry bid-rent curve will just be fully below the apple farm bid-rent curve.

Question 30

Partial derivatives indicate that the distance limit of cultivation increases as ______ (3 things).

Answer 30

- K falls - p rises - t falls (they will buy more land, so further away)

Question 31

What are 5 criticisms of von Thunen?

Answer 31

Unrealistic: - constant t - flat - homogenous - isolation - monocentricity

Question 32

What are the four rings von Thunen suggested, from inner to outer?

Answer 32

1. intensive farming and dairy 2. managed forest 3. extensive field crops like grains 4. ranching and grazing