Market Area Assumptions
The following assumptions will be maintained in our discussions of models which
involve market areas.
- the market is a straight line of length L with no obstacles to movement OR the world
is a flat homogeneous plane with no obstac

CUMULATIVE CAUSATION GROWTH THEORY
(also called metropolis - hinterland theory or dependency theory)
1. Suppose there are 2 regions one a MR more developed than the other a HR
2. With firms in the MR having larger markets, they will be able to realize Eof

Some comments on I-O
The main advantage of IO is that is takes very careful account of
the technology used by each industry and its demand and supply
relationships with the other sectors of the economy. However, the other
comments about the limitations of

British Columbia Provincial Economic Multipliers and How to
Use Them
The Impact Matrix
The MAKE and USE matrices are combined mathematically to
create the impact matrix, which specifies how a unit change in the
output of each industry affects the output o

EXPORT BASE GROWTH THEORY
1. According to multiplier theory
Y = kB
This says that growth in gdp is solely due to increases in the sale of basic goods, and
exports are an important component of this.
2. Development of an export specialization can be explai

STAPLES THEORY
1. When the export is agricultural or is based on the exploitation of a natural resource,
it is called a staple. e.g . fish, lumber, wheat & flour, mineral fuels.
2. New discoveries, new technologies, new transportation systems can lead to

Free spatial competition (Loschian location theory) Part 2
3. Since all firms are identical and because the world is a flat homogeneous plane
with consumers uniformly spread out on it, we will assume that in equilibrium all
firms find themselves in the sa

INPUT - OUTPUT ANALYSIS
Input - output analysis is a method of calculating income and employment
multipliers which takes account of differences in technology between
industries and of the linkages between industries. The data required is the
input-output

ECON 368
Formulation of the Keynesian Multiplier
We start from the expenditure formula for regional GDP denoted by Y .
Y = C + I0 + G0 + X0
M0
MC
Imports are divided into imports of consumer goods and services MC and other
imports M0 .
Consumer expenditur

Free spatial competition (Loschian location theory) Part 1
1. We now suppose that there are large numbers of possible vendors of the product,
all identical in terms of production cost and the cost of transporting goods from
their locations. These firms co

ECON 368
Regional Economics
SAMPLE FINAL
Time: 2 hours
Do 4 of the 5 questions. Please make your answers as clear and concise as possible.
Show all calculations, since partial credit will be given. All questions will be equally
weighted.
1. Consider a fir

ECON 368
Regional Economics
SAMPLE MIDTERM
Time: 50 mins.
Do 3 of the 4 questions. Please make your answers as clear and concise as possible.
Show all calculations, since partial credit will be given. All questions will be equally
weighted.
1. A high tech