ECON 340 URBAN ECONOMICS

MID TERM

25 MARKS

NAME OF STUDENT________________________

ANSWER THE FOLLOWING QUESTIONS 12.5 MARKS

QUESTION 1: Urban labor markets (Be sure to provide appropriate graphics.)

Consider a city that has decided to impose a pollution tax on its polluting firms. How would wages and employment be affected?How does the result depend upon the elasticity of supply of labor with respect to environmental quality?The wage elasticity of demand for labor by the city's non-polluting firms?

QUESTION 2: How would wages and employment be affected by restrictions on when companies could close plants or offices? (Be sure to provide appropriate graphics.)

Consider a region that produces lemons and ice and consumes lemonade (lemons and ice together). All resources are distributed uniformly throughout the region, and all people are equally productive in producing lemons and ice. There are scale economies in the production of ice, causing the development of an ice factory and a factory city. Suppose that a small refrigerator is introduced and imported into the region, providing an alternative to the ice purchased from ice factories. Explain and illustrate the effects of the refrigerator on

QUESTION 3: The market area of the ice factory

QUESTION 4: The size of the city surrounding the ice factory.

QUESTION 5:

Some retailers locate along major streets, forming commercial streets. Why don't these retailers locate in the city center or in a suburban mall?

MULTIPLE CHOICE12.5 MARKS

1. The externalities that Jane Jacobs believes are important for successful urban development are associated with:
2. firms with some monopoly power
3. localization economies
4. a strong hinterland economy
5. diverse urban industries and competitive firms
6. the presence of one or two relatively important industry clusters
7. In an equilibrium in Tiebout's model, each community consists of people who
8. are equally distributed among income groups
9. are heterogeneous with respect to preferences
10. prefer to live elsewhere
11. have the same preferences
12. are about equal in number from one community to another
13. If all firms in a city have lower costs than elsewhere because of better public infrastructure, this is an example of
14. urban or agglomeration economies
15. dynamic localization economies
16. static localization economies
17. a stable equilibrium
18. neoclassical technical change
19. Suppose that Toronto and North York are two adjacent municipalities. North York provides luxurious, high-cost services for its residents; Toronto provides minimal low-cost services. Initially each municipality uses a poll tax to finance its services. The residential population is in equilibrium with nobody wanting to move from one municipality to the other. Now suppose that both municipalities switch from the poll tax to a property tax to finance their services. Which of the following is likely to occur?
20. the equilibrium will be unchanged, with nobody wanting to move
21. poorer people who buy low-cost properties will tend to move from North York to Toronto
22. poorer people who buy low-cost properties will tend to move from Toronto to North York
23. poorer people who buy low cost properties will not want to move but richer people will move from North York to Toronto
24. both poorer and richer people will want to move from North York to Toronto
25. If higher levels of education in some city lead to rising productivity and falling average costs over time, this is an example of
26. dynamic localization economies
27. dynamic agglomeration economies
28. static agglomeration economies
29. static localization economies
30. none of the above
31. If a new development in some urban area causes public costs to rise but only by as much as the extra property taxes generated by the new development, then a development charge or levy is
32. efficient and therefore warranted
33. inefficient and should not be imposed
34. possibly efficient, but the anonymity test needs to be applied
35. efficient, but would distort the use of resources
36. warranted if it is less than the capitalized value of the annual taxes
37. Property A and property B are two single-family residential properties in a municipality that has just introduced market value assessment. Before market-value assessment, A and B were paying the same annual property tax but A had a lower assessed-to-true-market-value ratio than B. This means that after the introduction of market value assessment
38. they will continue to pay the same tax
39. B will pay a higher tax than A
40. you can't tell from this information how much their relative taxes will be
41. A will pay a higher tax than B
42. both properties taxes will have to go up
43. Local taxes based on the benefits principle would
44. be distributed among people in the same way that benefits from local spending are distributed
45. be distributed among people in the same way that the costs of local service are distributed
46. likely be property taxes
47. mean that the taxes on poor people would have to be less than the taxes on rich people
48. result in a redistribution of benefits towards lower income families
49. Local cost-based taxes are less efficient than benefit-based taxes if
50. households or businesses cannot vary their exposure to or use of local services
51. the costs of the various services are greater than the benefits
52. cost-based taxes are never less efficient than benefit-based taxes
53. the objective is to redistribute income towards the poor and away from the wealthy
54. the benefit tax is a poll tax

10. Any net tax increase, i.e., a tax increase in excess of a benefit increase, cannot be shifted forward to tenants if the tenant demand curve is completely elastic or if

a.tenants are partly immobile

1. the tenant demand curve is completely inelastic
2. the building supply curve is completely inelastic
3. the building supply curve is completely elastic
4. both the tenant demand curve and the building supply curve have some elasticity

11. The theoretical result that each homogeneous group of people in some mixed jurisdiction would like to have their own, segregated facilities and services is not necessarily true if

a.in the mixed situation, everyone is paying the same amount for the service

b.services are paid for through a poll tax

c.different people have different tolerances for congestion

d.the constant returns to scale assumption holds in the provision of services

e.in the mixed situation, everybody is paying a different amount for the service

12. The so-called "new" growth models allow for the possibility that some jurisdictions may grow faster than others over long periods of time. This possibility occurs because, compared with neoclassical growth models, in the new growth models

a.there are diminishing returns to every factor

1. innovation is exogenous to the model
2. the growth rate of education is given
3. the growth rate of the labour force is given
4. there are increasing returns to scale for some factor of production

13. A local property tax will be a benefits tax only if

1. richer families live in higher valued properties
2. the distribution of property values is approximately the same as the distribution of income among people
3. the distribution of property values is approximately the same as the distribution of local service benefits among people
4. property values are approximately the same for all people
5. the property tax is always a benefits tax no matter what the distribution of property values among people

14. Urbanism is important because

a. It is in cities that many modern challenges to humanity will play out.

b. The pattern of urban activities affects emissions and pollution.

c. The pattern of urban form affects land use and protection of ecosystems.

d. All of the above.

15. Urbanism is described here as

a. The space between buildings

b. The connected system of public and private spaces

c. Big cities

d. The public realm

16. A factor that is not critical to the success of urbanism is

a. The level of detail at pedestrian scales

b. The expressive style of buildings

c. The shape and position of buildings, and how they shape public space

d. The aesthetic character of buildings

17. The aesthetic quality of urbanism matters most because

a. It reflects the vision of leading contemporary artists

b. It stimulates shopping and economic activity

c. It raises property values

d. It promotes quality of life and sustainability

18. Mixed use is important because

a. It promotes interaction between different people during the day

b. It provides visual interest

c. It provides social equality

d. It increases economic performance

19. Diversity was noted to be important because

a. It creates a fairer and more just city

b. It promotes opportunity and creative exchange

c. It creates visual interest

d. It helps with the successful branding of a city

20. Diversity should include variations in

a. Income

b. Ethnicity

c. Age

d. All of the above

21. Density is important because

a. It tends to be associated with lower carbon emissions

b. It can be used to create urban interaction and vitality

c. It supports connectivity and public transport

d. All of the above

22. Higher density should be applied

a. Uniformly

b. Only in large cities

c. In a range of situations, depending on context

d. In a range of situations, but always as high as possible

23. The difference between a hierarchy and a web-network is

a. A hierarchy is more complex

b. A hierarchy is more ordered

c. A web-network branches out like a tree

d. A hierarchy branches out like a tree

24. The fundamental element of the sustainable neighbourhood is the

a. Pedestrian shed

b. Transit stop

c. Wildlife corridor

d. District energy plant

25. Design for change and resilience is important because

a. A neighborhood will grow and change in unpredictable ways

b. A neighborhood's growth must be controlled

c. The urban designer needs to know which businesses or activities will likely occur

d. A neighborhood can always be rebuilt when it becomes unfashionable