ED79.15 Urban Economics and Finance Assignment No. 1, January 2014 Semester, Due: 17 February 2014 Dr.

Vilas Nitivattananon 1. What are major issues in urban evelo!ment an management relating to e"onomi"s an #inan"e$ Also "hoose one o# the issues, %ith s!e"i#i" e&am!le, to is"uss its !roblems an ho% to a ress them. 2. A number o# "or!orations use a vertising #irms to evelo! mar'eting "am!aign. (a"h "or!oration buys one "am!aign !er year, an the "ost !er "am!aign is )120*n, %here n + the total number o# "or!orations in the "luster ,an "am!aigns !er year-. .he "ost o# labor !er #irm is )/00n. A "or!oration1s !ro#it e2uals its total revenue o# )120 minus the sum o# its mar'eting an labor "osts. .here are t%o lo"ation o!tions3 an isolate site ,n + 1- or a "luster %ith u! to #ive "or!orations. a. 4se a gra!h to sho% the !ro#it ga! ,!ro#it in "luster 5 !ro#it in isolation- #or one through #ive "or!orations. b. 6# initially all "or!orations are isolate an then one joins another to #orm a t%o7"or!oration "luster, %ill other #irms have an in"entive to join the "luster or not$ Why$ ". Determine long7run e2uilibrium 5 in"lu ing number o# "or!orations in the "luster, a !ro#it earne by ea"h "or!oration, an the i##erent !ro#it o# a #irm bet%een an isolate site an in the "luster. /. What are 'ey #a"tors in#luen"ing the mar'et si8e an ho% a "ity*region may gro% ,or not- at i##erent rates ,or si8es-. Dis"uss, %ith s!e"i#i" e&am!les, #or at least 2 #a"tors.