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Chapter 5
Market Determinants of Value
Test Problems
1. The “gravity” that draws economic activity into clusters is:
2. Spatial or distance relationships that are important to a land use are called its:
3. Cities have tended to grow where:
4. The economic base multiplier of a city tends to be greater if the city is:
5. The best example of a base economic activity would be a:
6. Important supply factors affecting a city’s growth or growth potential include
all except the:
7. Which of these are true about agglomeration economies?
8. Which of these influences will decrease the level of a bid-rent curve at the
center of the city?
9. In a system of bid-rent curves, assuming that households are identical except
for the feature noted, which of these prospective bidders will bid successfully
for the sites nearest to the CBD?
10. A large university is an example of what kind of economic phenomenon?
Study Questions
1. List five major economic base activities for your city of residence.
2. Find the historical population figures for your community for the 20th
century. Create a chart by ten-year intervals. Determine the most rapid
periods of growth, and try to discover what caused them. (One source of the
necessary population numbers is the U.S. Census website: “Population of the
1-00 Largest Cities and Other Urban Places in the United States: 1790 to
1990”)
3. On the U.S. Census web site, use the approach shown in the chapter in Explore
the Web to access the American Community Survey. For your county, and for
your state find the distribution of income for all households. Graph the
distributions using percentage for each income interval. Which is higher,
county or state?.
Solution: This solution is MSA specific. However, as an example, in Alachua
Alachua County, a university community has a higher concentration of lower
.
4. Identify at least five locational attributes that are important in the location of a
fast-food restaurant. Compare notes with someone in the industry such as a local
restaurant manager or owner.
Solution: Likely locational requirements for a fast-food restaurant could include
these: visability, high traffic counts, easy entry and exit from the site, good
5. Perfect Population Projections Inc. (PPP) has entered into a contract with the city
of Popular, Pennsylvania, to project the future population of the city. Popular has
become a popular place in recent years as indicated by the following data:
Total Total Basic Nonbasic
Year Population Employment Employment Employment
2005 50,000 25,000 6,250 18,750
2006 53,000 26,500 6,625 19,875
2007 57,000 28,500 7,125 21,375
2008 65,000 32,500 8,125 24,375
2009 70,000 35,000 8,750 26,250
2010 ? ? 9,000* ?
*Estimated from surveys
The contract states that PPP must project Popular’s population for the year 2005
using both a simple linear method and an economic base analysis. The ratio of
population to total employment is 2.0833.
Your help is needed!
Solution: Using a simple linear method, the growth trend in the population would
be extended (extrapolated) one year. The extrapolation could be done graphically,
Alternatively, it could be done by simple linear regression, resulting in an
estimated annual incremental growth of 5,900. Thus the population by linear
