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Urban economy - Assignment Example

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A city with good transportation structure will attract a bigger population which means big economic activity and ultimately a city’s…
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Urban economy
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Urban Economics The division of labor is a determinant in the growth of a because it dictates the type of economic activity that the city thrives on. A city with good transportation structure will attract a bigger population which means big economic activity and ultimately a city’s growth. Accessibility is closely related to transportation hence the world biggest cities have embraced this ideology to ensure growth. Specialization is the ability of cities to effectively manage their resources to ensure development for instance labor specialization. Land prices fall because of the increase of transportation cost to the city cores where main economic activity is. The buildings are taller to make use of space and accommodate the main businesses that give the city its developmental characteristic. Gas price determines the construction rate of city structures, a high price less development and vice versa (Florida & Mellander, 2014). Rising incomes have a direct proportionality effect on cities because the development will be focused to assist the well-being of the income earners. Land prices take long because of the economic speculation that is linked to profitability of the land. Sprawl is considered a market where decision makers have direct impact to the spatial growth of the city.
Consumer locational equilibrium is the ability for the consumer to embed owns preference over distance distribution cost when choosing to consume a product. Compensation differential is a state offered wage to offset the balance between a preferred and un-preferred job. Terminal cost is the cost incurred when disposing the asset (Florida & Mellander, 2014). Externality damage is unwanted cost to the least expected party. Scale economy is the advantages that in terms of cost cutting that establishment stand to gain due to magnitude of operation.
Reference
Florida, R., & Mellander, C. (2014). Talent, skills and urban economics. Mimeo. Toronto:
Rotman School of Management, University of Toronto. Read More
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