UGBA 184 Questions and Answers 2024 Updated

UGBA 184 Questions and Answers 2024 Updated Economic geography - CORRECT ANSWER-another name for urban economics Questions from geography - CORRECT ANSWER-where do people live, work, produce, consume? whydo they move (or not)? where should we invest/build? Tools from standard economics - CORRECT ANSWER-• utility/profit maximization (people/firms do "what's best for them" under constraints) • equilibrium (when no one wants to deviate unilaterally) • supply and demand (prices adjust to equate them) • positive (what is) versus normative (what ought to be): what's best for each individual is not always best for all! What is a city? - CORRECT ANSWER-• An urban area is a "densely settled core of census blocks that meet minimum housing unit density and/or population density requirements" • US Census bureau defines urban areas as above 50,000 • Census defines urban clusters as above 5,000 • Recent change from 2,500 to 5,000 means the urban share slightly dropped in2022, from 81 to 80%! • Definitions are always a bit arbitrary... Cities and "the Wealth of Nations" - CORRECT ANSWER-● Urbanization tends to be heavily correlated with economic development ● Correlation does not mean causation! ○ Maybe growth causes cities: higher income people want to live in cities? ○ Maybe cities cause growth: putting people together increases economic efficiency ○ Maybe some secret third thing causes both (technology, laws and institutions...)! ● In any case, understanding the economics of cities is essential to understand the modern economy20Cities and "the Wealth of Nations" When making location decisions, people consider.... - CORRECT ANSWER--"quality-oflife"(urban amenities) -cost-of-living (the "price index") - the availability of well-paying (or interesting) jobs -cost of housing, -commuting costs When making firm location decisions,managers must trade-off - CORRECT ANSWER-• the productivity benefits of cities(which raise production and profits) • against urban costs (both space and labor are mo