Price-consumption curve: curve tracing the utility-maximizing combinations of
two goods as the price of one changes.
Individual demand curve: curve relating the quantity of a good that a single
consumer will buy to its price. It has two importan
Theory of consumer behavior: it is the description of how consumers assign
incomes between different goods and services to maximize their well-being.
Consumer behavior is based on preferences.
3 basic assumptions about preferences:
Should efficient distributions always be implemented?
Positive analysis: it describes relationships of cause and effect.
Normative analysis: it examines questions of what should be.
Economists may disagree because of different scientific analyse
Exam 2 Study Guide
End of the Chapter Summaries
This chapter discusses the conditions that lead households to sort themselves
into neighborhoods according to their demand for local public goods, taxed
goods, income, and race.
Here are the main p
First Set of Sample Test Questions
Indicate whether you believe the statement is true or false and carefully explain your
(1) If all production processes were weight gaining, a single giant urban center
*This is an incomplete and unevenly developed draft of a work-in-progress. Please do not
quote without permission.
September 15, 2016
African Americans and the Political Economy of Race:
individualist and stratification perspectives on persistent inequali
Learning Styles /Study Strategies/Note-taking/Memory
Now that you have had a chance to practice with a variety of study strategy
methods, describe your previous study strategies.note-taking system (prior
to this course).
Axiom: state or prop thats regarded as being established, accepted, or self-evidently
true; theres a general consensus that an axiom is true; not a lot of uncertainty about
1) prices adjust to achieve locational equilibrium:
Chapter 1: Introduction and Axioms of Urban Economics
Urban economics can be divided into six parts:
1) Market forces in the development of cities: interurban location decisions of
firms/households generate cities with different sizes and econ structures.
Benefits of a larger city:
-competition among firms ensures wages reflect productivity so wages are higher
in larger cities; labor productivity increases with the size of the workforce but at a
-utility is income minus the value of leisur
The traditional (nongeographical) sources of economic growth:
1) capital deepening: an increase in the amount of capital per worker; it increases
productivity and income bc each worker works with more capital
2) increases in human capital: human capital i
The Importance of the Central City to the Regional and National
Economy: A Review of the Arguments and Empirical Evidence
In the postwar era:
Population and employment in suburban areas has been growing rapidly. However,
most central cities have been decl
Reading: economic activity was moving to suburbs and political power began
favoring the suburbs bc of sprawl; became difficult to get funding for central city
problems; suburban areas positively affected by the conditions of their central city
Chapter 2: Why Do Cities Exist?
Cities exist because people arent self sufficient we specialize in a labor task
and use our earnings from doing this task to buy the things we cant produce
-labor specialization and large-scale production allow u
Why do firms cluster?
The forces acting on firms in a single industry together are called localization
economies, indicating that they are local to a particular industry
-when agglom economies cross industry boundaries, they are called urbanization
Lynching first became prevalent in the United States around the time of the
Revolutionary War. It was more common in Southern states and was actually named after the
brother of the man that founded Lynchburg Virginia. Lynching became a f