Week 4

    Master this deck with 11 terms through effective study methods.

    Generated from uploaded pdf

    Created by @isabella14

    What is agglomeration?

    Clusters of people and firms in a specific area.

    What are economies of scale?

    Lower marginal costs from increased production.

    What are increasing returns to scale?

    Higher productivity with more labor for larger markets.

    What does utility represent?

    The benefit from consuming goods.

    How do cities disrupt spatial homogeneity?

    They create higher population densities than uniform distribution.

    What drives the formation of cities?

    Economic benefits from agglomeration for individuals and firms.

    What is the Von Thünen Model?

    A model explaining land value based on market proximity.

    How is land value determined in the Von Thünen Model?

    By net income after accounting for costs.

    What affects transportation costs in the Von Thünen Model?

    The perishability of different goods.

    What is the income equation in the Von Thünen Model?

    Income equals yield times price minus costs.

    What happens to expected profit as distance increases?

    Profit decreases due to rising transportation costs.