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Exam Questions and Answers Regional and Urban Economics
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Examenvragen RUE1. Why is it important to study RUE today?
We live in interesting times where location is more important than ever. The interpretation
of the study has also changed. People are way more open minded; people have a growing
interest in spatial economies and there is also more and more data available.
Current economic geography:
- Pervasive globalization
- Communications revolution
- Technological improvements in physical transportation
- Post Fordism
- Change in nature of labor markets
- Environmental concerns
2. Why are the simple location theories too simple?
- Based on homo economicus => not realistic
- No realistic geographical variation in market demand
- No geographical variation in production
- Transport costs are not uniform for different goods
- Plants produce a variety of outputs (not take just 1 into account)
- Labor is not available in unlimited amounts
3. Explain Weber market and input orientation.
Based on transportation costs but also labor costs and economies of scale
For 1 good:
Difference in goods
- Pure
- Impure
- Ubiquitious
Material index
MI>1: bulk reducing => input oriented
MI<1: bulk gaining => output oriented
For more goods:
Isodapane analysis:
1. Isotims : lines with same transportation costs (closer=> transport more expensive)
2. Determine optimal location based on transportation costs => isodapanes: penalty for
not locating at P
3. See whicb location has more pull
4. Take into account locations where labor is cheaper (critical isodapane: where what
you save by cheaper labor equals what you lose by not location at optimal location
(when inside critical isodapane is, is better to locate at location with cheaper labor))
5. Take into account places where economies of scale can be found
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