1 Principles of Economic Location Free Online FlashCards

What does economic location study?

Economic location studies why production, services, and trade occur in particular places.

What is generalized cost?

Generalized cost includes expenses and frictions involved in producing goods and reaching customers, such as wages, transport, delivery time, and coordination.

What makes a site the best location for production?

The best site offers the strongest overall balance of costs and revenue; the lowest wages or shortest distance to a resource alone may not determine it.

What does market access measure?

Market access is the amount of economic activity—such as consumers, workers, suppliers, and jobs—that a place can reach through distance and transport connections.

Why might a factory using heavy inputs locate near a mine or port?

A factory using bulky, heavy inputs may locate near a mine or port to reduce the cost of moving those inputs, even if it is farther from consumers.

What location factors may matter for lightweight, high-value goods?

A producer of lightweight, high-value goods may prioritize skilled labor, specialized suppliers, or access to a large market.

How can natural resources shape economic location?

Mining, farming, forestry, and energy production often locate where the natural resource is found or can be harvested.

What determines where resource-based products are processed?

Processing may occur near the resource, transport routes, or customers, depending on the relative costs of moving raw materials and finished products.

Why do many personal services locate near their customers?

Retail, health care, and many personal services generally locate near the people they serve.

What are economies of scale?

Economies of scale occur when average production cost falls as a firm produces more, often making concentrated production at a large plant efficient.

What are agglomeration economies?

Agglomeration economies are advantages from firms and workers locating near one another, including shared infrastructure and suppliers, deeper labor pools, better job-skill matches, and learning.

How can concentration of economic activity reinforce itself?

Firms attract workers and suppliers, enlarging the local market; that larger market can then attract further economic activity.