Structure of Cities

Question 2

Q: What determines supply in economics?

Answer 2

A: Supply depends on production volume increasing with obtainable price. Short-term impediments can make supply inelastic.

Question 4

Q: What is non-normal demand?

Answer 4

A: When higher prices lead to increased consumption

typically seen in luxury items.

Question 6

Q: What is elasticity?

Answer 6

A: The extent to which supply/demand responds to price changes. Demand becomes inelastic when service quality matters more than price.

Question 8

Q: What is the neoclassical view?

Answer 8

A: Markets act efficiently through supply-demand interaction
reaching equilibrium through individual decisions.

Question 10

Q: What did Hayek emphasize?

Answer 10

A: Spontaneous order in markets and decentralized decision-making leading to efficient outcomes.

Question 12

Q: What was Friedman’s main argument?

Question 13

A: Minimal government intervention and strong belief in free market efficiency.

Question 15

📚 URBAN ECONOMICS

Question 16

Q: What is Smith’s rent gap theory?

Answer 16

A: The difference between current rental income and potential post-development value

Question 18

Q: What did Cheshire (2013) argue?

Answer 18

A: Market failures in urban land markets occur when containment restricts supply leading to increased prices.

Question 19

A: Market failures in urban land markets occur when containment restricts supply

Answer 19

leading to increased prices.

Question 20

What is Alonso’s bid-rent theory?

Answer 20

It posits that different land users compete for land based on their ability to pay rent, which declines with distance from the CBD, creating a land value gradient.

Question 21

How does Alonso’s bid-rent theory explain post-war suburbanisation in the US?

Answer 21

It explains suburbanisation as a rational response to changes in employment, transport, and preferences, with households moving outward to maximise utility.

Question 22

What role did the decline of inner-city manufacturing play in suburbanisation according to Alonso’s model?

Answer 22

It reduced the incentive to live centrally, as jobs moved to suburban areas, aligning with the model’s logic of land use efficiency.

Question 23

How does Alonso’s model view suburbanisation in terms of utility maximisation?

Answer 23

Households trade off commuting costs for larger homes and green space, assuming perfect competition and efficient land allocation.

Question 24

What is the Marxian explanation for suburbanisation?

Answer 24

It sees suburbanisation as driven by capital accumulation, class relations, and state intervention, not just consumer choice.

Question 25

How does Harvey’s theory of capital accumulation relate to suburbanisation?

Answer 25

Harvey argues that suburbanisation is a spatial fix for surplus capital, with the built environment absorbing investment to sustain capitalist growth.

Question 26

What role does the state play in the Marxian explanation of suburbanisation?

Answer 26

The state facilitates suburbanisation through infrastructure, mortgage subsidies, and zoning, supporting capital interests.

Question 27

How do Phelps and Wood (2010) critique the bid-rent model?

Answer 27

They argue that post-suburban development challenges the model, showing cities have become polycentric and shaped by capital flows.

Question 28

How does the Marxian perspective explain the role of the automobile in suburbanisation?

Answer 28

It sees the automobile and highways as state-led investments enabling suburban expansion and capital accumulation.

Question 29

What is the filtering model of housing, and how does it relate to suburbanisation?

Answer 29

It assumes older housing becomes affordable over time, but Marxist theory explains cycles of disinvestment and reinvestment driven by capital.