Download Hotelling Location Model - Regional and Urban Economics - Exam and more Exams Economics in PDF only on Docsity!
Ollscoil na hÉireann, Gaillimh GX_____
National University of Ireland, Galway
Semester 1 Examinations 2008/
Exam Code(s) 3BA1, 3BA5, 3BA6, 4BA4, 4BA8, 1EM1, 1OA1, 3BC1, 4BC2, 4BC3, 4BC4, 4BC5, 1EK Exam(s) B.A., B.A. (ESS), B.A. (PSP), B.A. (Int’l), Erasmus, Occasional, B.Comm., B.Comm. (Language), H.Dip.Econ.Sc. Module Code(s) EC Module(s) Regional & Urban Economics Paper No. 1 Repeat Paper External Examiner(s) Professor Cillian Ryan Internal Examiner(s) Professor Eamon O’Shea Professor Michael Keane Instructions: Section A. Do two (2) questions. Each question is worth 10 points. Section B. Do two (2) questions. Each question is worth 25 points Duration 2 hours No. of Pages 3 pages in total Department(s) Economics Course Co-ordinator(s) M. Keane Requirements : MCQ Handout Statistical Tables Graph Paper Log Graph Paper Other Material
Section A. Do two (2) questions. Each question is worth 10 points
- Consider the following ways in which a given national income of 12 units might be divided between three regions A, B and C PA^ PB^ PC State 1 2 2 8 State 2 1 3 8 State 3 1 5 6 Which do you consider the most equal and which the least equal? Show how you get your answer.
- Two outcomes in the Hotelling location model are illustrated in Figure 1. In State 1, Figure 1a, both firms are located at ½. In State 2, Figure 1b, B is located at ½ and A at ¼. A’s market B’s market ¦--------------------1/2--------------------¦ State 1 a,b Figure 1a ¼ 3/8 1/ ¦-----|-------|---------|-----------------------¦ State 2 ←A’s market→ ←— B’s market —→ Figure 1b Using the cost-benefit criterion which state is the most desirable?
- Regional competitive advantage may be derived with the following framework; let us suppose that product prices, Pn, are the same throughout the country and we set Pn = 1. Prices are fixed through a mark-up ( 1 + α ) on direct costs which differ among regions. If n means nation and r the region we have Pn = ( 1 + α )r (wr/xr) (1) where wr is the regional wage level and xr is the regional productivity level. We have four regions with data on wage and productivity levels as follows; Region A Region B Region C Region D wr 12 16 9 15 xr 15 18 12 24 Derive a spatial-profitability curve, i.e. with locations on the x-axis and profitability on the y-axis.
