ch5 day2

Because a city’s output capacities change slowly over time, it is important to understand the supply side (long-run) factors affecting urban growth. Which of the following would NOT be considered a supply-side factor that impacts a city’s economic growth?

• nature of the available labor force

• quality of life within a community

• cooperation of local leadership and government

• city’s export activity

Sophisticated firms recognize that their “cost of doing business” can depend on the support of local governments in assuring roads, utilities, reasonable taxation, and compatible land use controls are in place. Based on your understanding of the factors influencing the growth of a city, the previous statement best aligns with which of the following supply-side factors?

• characteristics of the available labor force

• quality of life and leadership within a community

• industry economies of scale

• agglomeration economies

Cities such as New York are able to host a variety of complex industries because of the development of specialized resources that support their growth. When specialized resources emerge in response to demand from multiple industries, this is referred to as:

• industry economies of scale.

• agglomeration economies.

• locational monopoly.

• economic inefficiencies.

The growth of the motion picture industry in Los Angeles, the petrochemical industry in Houston, the software industry in “Silicon Valley,” are all examples of how the growth of an industry within a city can create cost advantages for future growth. Economists refer to this phenomenon as:

• industry economies of scale.

• agglomeration economies.

• locational monopoly.

• economic inefficiencies.

A public planning movement that explicitly advocates a cul-de-sac hierarchy of development, an automobile oriented society, and separated land use is more commonly referred to as:

• urban sprawl.

• urban service area.

• traditional residential planning.

• new urbanism.

Eminent domain is the right of government to acquire private land, without the owner’s consent, for public use, with due process and just compensation. The legal procedure for exercising the right of eminent domain is referred to as:

• growth restriction.

• urban sprawl.

• blighted development.

• condemnation.

Traditional zoning regulations are criticized for often being too rigid in forcing uniform types of development. One proposed solution to this issue relaxes traditional zoning requirements to allow a specific proposed plan for variable density and more flexible setbacks, in exchange for open spaces and recreational areas. This is more commonly referred to as a:

• planned unit development.

• performance standard.

• impact fee.

• growth restriction.

In the history of eminent domain, the Kelo v. New London, Connecticut decision of the U.S. Supreme Court in 2005 affirmed the possibility of a community being:

• prohibited from using eminent domain.

• restricted to use of eminent domain only for actual government (public) land uses.

• able to use eminent domain to acquire property for private development if it serves public purpose and the current land use is blighted.

• able to use eminent domain to acquire property for private development if it serves public purpose even if the current land use is not blighted.

In efficient financial markets, unregulated competitive bidding should bring about the most productive use of an asset and the price paid for that asset should reflect fair value based on its usefulness. In real estate, this is not always the case. For example, there is no substitute for certain pieces of land which gives the owner a bargaining advantage in determining the value of the land. This feature of real estate markets is commonly referred to as:

• incomplete information.

• locational monopoly.

• positive externality.

• negative externality.