Problem_Set_2 - Department of City & Regional Planning...

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Department of City & Regional Planning CP 113A - Fall 2006 U niversity of California at Berkeley Mark Wolfe PROBLEM SET #2 Due in Class Thursday, October 3, 2006 PLEASE TYPE YOUR ANSWERS & DRAW GRAPHS NEATLY 1. Assume the following statements are true. For each statement, identify in a few short sentences the economic concept or principle that best explains why it occurred. If you think there are more than one, say so and explain why. a. Film studios and film-production support firms cluster in Southern California in the 1910s and 1920s. b. Federal Express locates its hub in Memphis. c. Twenty art galleries choose to locate in a single building near Union Square in San Francisco. d. Intel, the chipmaker headquartered in Santa Clara, Cal., opens a chip fabricating plant in Israel. e. See’s Candies, a confectioner, locates its candy-making factory (using assembly-line technology) in South San Francisco, where labor costs are high relative to more suburban and ex-urban locations. 2. Consider two adjacent countries, Northland and Southeria. Southeria has a large supply of workers and a low market wage, but is arid and without substantial forest resources. Northland, by contrast, is temperate and well forested, but has a shortage of workers and a relatively high market wage. The countries are separated by a river, and the only crossing points
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Problem_Set_2 - Department of City & Regional Planning...

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