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Flashcards in Test Deck (22):

What is economics?

Profit maximising and utility maximising choices?


What is geography?

Location and the spatial distribution of activity.


What is urban and regional economics?

Profit maximising and utility maximising location choices.
The consequences of location choices.


What is happening to the population in urban areas?

55% of the worlds population is living in urban areas.
Projected to reach 70% in 15-20 years.
In 1990s there were only 10 cities with a population exceeding 1 million people. Now there are 30.


What is the death of distance hypothesis?

With improving technology and the Internet, distance becomes less of a factor.
Things can be shipped around the world.
Due to globalisation.


Why does location matter?

Even though natural resources can be distributed.
Human capital and social capital are not well distributed.
Culture and history of the location matters. May already have infrastructure.


What is social capital?

The networks of relationships among people who live and work within a particular society, enabling that society to function effectively.


What is tacit knowledge?

Knowledge that you gain from personal experience.
For example your culture, your job or community.
Knowledge is not just information, it is what you can do with information.
Difficult to transmit as it is not codified knowledge.


What is a city?

1) grid cells with a density of more than 1,500 Inhabitants per square km are selected
2) the neighbouring cells which meet this requirement are clustered. The clusters with populations higher than 50,000 are urban centres
3) all areas with at least half their population inside of the urban area are selected as candidates to become cities.
4) in the UK cities can be royally appointed.
5) interaction


What does R.Sennet say about cities?

A city is a place whee strangers are likely to meet, where new ideas are formed in public space. A common ground. Yet, true cities are dense, messy and uncontrolled.


How does free dictionary define a city?

A centre of population, commerce and culture.


How does B. Goodall define a city?

A city is a relatively large and permanent human settlement.


How could a region be defined?

By particular types of economic activity tangled in history, culture, administrative or geographical boundaries.


How are normative regions defined?

According to political will (mostly based on size of population for administrative purposes but also historical, cultural and other factors)


How are analytic (functional) regions defined?

According to geographical criteria or, more often, using socio-economic criteria (e.g. Homogeneity, complimentarily and specialisation of regional economies).


How is a region defined in Europe?

The Nomenclature of Territorial Units for Statistics (NUTS) is defined and developed according to normative perspectives. Three levels are defined: NUTS1, NUTS2 and NUTS3


What is the definition of a region?

A relatively contained and cohesive network of trade is called a functional economic area (FEA).


What components make a region?

Labour market areas - Travel to work areas (TTWAs)
Housing markets
Supply chains in industry and commerce
Transport networks
Service markets for consumers


What are the five axioms?

1) Prices adjust to achieve local equilibrium ie house prices
2) Self-reinforcing effects generate extreme outcomes
3) Externalities cause inefficiency
4) Production is subject of economies of scale
5) Competition generates zero economic profit


What does Self-reinforcing effects generate extreme outcomes mean?

Leads to changes in the same direction.
Cluster of artists attracts other artists.
Dynamic returns.
Path dependency.
Revolutionary economics.


What is meant by production is subject to economies of scale?

Average cost decreases as production increases.
Invisible inputs: required to produce one or a thousand units.
Factor specialisation: benefits from continuity and repetition.
Extent of scale varies across activities.


What is meant by competition generates zero economic profit?

Entry into market continues until economic profit is zero. Aka opportunity cost.
Economic cost includes explicit cost and opportunity cost of time and funds.
Firms earn just enough to stay in business, but not enough to attract firms.m