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Free Practice Quiz Question List

1 Principles of Economic Location Online Quiz Questions

Use this free practice quiz with 20 questions to review 1 Principles of Economic Location, test your knowledge, and prepare for your next test or exam.

20 questions
01
True or false
1 point

A firm choosing a production site should compare overall costs and expected revenue rather than selecting the site with the lowest wages alone.

  1. A

    True

  2. B

    False

02
True or false
1 point

Because digital delivery is available, physical proximity and reliable local connections no longer provide value to service businesses.

  1. A

    True

  2. B

    False

03
Choose one
1 point

A factory uses heavy, bulky materials from a mine and sells finished goods across the region. Which approach best applies the economic-location principles?

  1. A

    Choose the site nearest to the largest consumer market, regardless of input transport costs.

  2. B

    Compare the savings from locating near the bulky inputs with the costs of reaching customers.

  3. C

    Choose the site with the lowest wages, even if other costs are higher.

  4. D

    Locate as far as possible from transport infrastructure to reduce coordination costs.

04
Choose one
1 point

A manufacturer faces large machinery costs and can ship its products to distant markets. When might one large plant be preferable to several small facilities?

  1. A

    Divide output among many small plants, because fixed costs rise as output is concentrated.

  2. B

    Concentrate output at one site regardless of transport and coordination costs.

  3. C

    Consider concentrating production if scale savings are greater than added transport and coordination costs.

  4. D

    Choose the site with the lowest land price, since fixed costs do not affect production scale.

05
Choose one
1 point

A company compares two sites: one is near a large population but poorly connected, while the other has strong transport links to several cities. Which concept should it use to assess the range of consumers, workers, and suppliers each site can reach?

  1. A

    How much economic activity a place can reach, given distance and transport connections

  2. B

    How many natural resources are physically located within a place

  3. C

    The total number of firms operating in a country's largest city

  4. D

    The distance between a firm and its nearest competitor, regardless of transport

06
Written response
1 point

A growing business district becomes less attractive to some firms because congestion and land prices increase. What is the term for these costs of concentration?

07
Written response
1 point

What term describes the consumers, workers, suppliers, and jobs that a place can reach, taking distance and transport connections into account?

08
Fill in the blank
1 point

When a firm's average production cost falls as it produces more, it is experiencing .

09
Fill in the blank
1 point

In a spatial pattern with a concentrated area and a less-concentrated surrounding area, the concentrated area is called the .

10
Choose all
1 point

A group of firms in the same city is considering the potential advantages of locating near one another. Select all the benefits that can arise from agglomeration.

  1. A

    Firms can share infrastructure and suppliers.

  2. B

    Firms are guaranteed lower land prices as more businesses locate nearby.

  3. C

    A larger labor pool can improve matching between jobs and skills.

  4. D

    Nearby firms no longer face competition for workers.

  5. E

    Proximity can support learning through exchanges of ideas.

11
Choose all
1 point

A region extracts a natural resource and is deciding where to process it. Select all statements that correctly describe how the extraction location affects this decision.

  1. A

    Farming or mining may be located where the resource is found or can be harvested.

  2. B

    Processing must always occur at the resource site.

  3. C

    Processing may be located near the resource, depending on transport costs.

  4. D

    Processing may instead be located near transport routes or customers.

  5. E

    The location of extraction makes transport costs irrelevant to processing decisions.

12
Open ended
1 point

A food-processing company is comparing a site near farms with a site near a large city. Explain how it should assess the two locations, including at least three relevant factors and why the best choice may depend on the company's circumstances.

13
Choose one
1 point

A producer sells to regional customers but is considering a site near a large city. Which reasoning best explains why that location could still be advantageous?

  1. A

    A nearby market matters only if a firm sells exclusively to local customers.

  2. B

    A nearby market can support customers, workers, and business partners, while connections can link a firm to wider trade.

  3. C

    Market size replaces the need to consider transport infrastructure.

  4. D

    A large market always outweighs input, labor, and operating costs.

14
Choose one
1 point

Which statement best describes how digital delivery affects the location needs of services?

  1. A

    Digital delivery removes the value of physical proximity for every service.

  2. B

    Digital delivery can reduce the need for physical proximity without eliminating its value.

  3. C

    Digital delivery makes services dependent on locating beside natural resources.

  4. D

    Digital delivery matters only when a service is sold to local customers.

15
Choose one
1 point

A firm is comparing sites with different wages, land costs, transport expenses, and access to customers. What is the best basis for choosing a site?

  1. A

    Choose the location with the lowest wages, regardless of other expenses.

  2. B

    Choose the location closest to customers, regardless of production costs.

  3. C

    Compare the overall costs and expected revenue of operating in each location.

  4. D

    Choose the location with the lowest land cost, even if transport costs rise.

16
Written response
1 point

What term describes how much economic activity a place can reach given distance and transport connections?

17
Choose one
1 point

A firm providing specialized business services is choosing a location. Which set of nearby resources is most likely to benefit it?

  1. A

    Near natural resources, since all services depend on extracting them.

  2. B

    Near firms, skilled workers, and information networks.

  3. C

    Far from firms and workers, to avoid all coordination costs.

  4. D

    Only in places where services can be delivered digitally.

18
Choose one
1 point

A manufacturer has high fixed costs for machinery and research. When should it consider concentrating production at one large plant to serve distant markets?

  1. A

    The firm should always operate many small plants near customers.

  2. B

    The firm should centralize production even if transport costs exceed the savings.

  3. C

    The firm should weigh the cost savings from scale against added transport and coordination costs.

  4. D

    The firm should choose a location only by comparing wage levels.

19
True or false
1 point

True or false: If costs and service quality are comparable, a walk-in clinic is generally better located where the people it serves can reach it than at a remote site.

  1. A

    True

  2. B

    False

20
Written response
1 point

Besides access to jobs, name one category of access that households and workers may weigh when choosing where to live or work.