Nigerian Army College of Environmental Science and Technology (NACEST), NASME

Barracks, Makurdi. 2ND Semester Examination.2022/2023 Academic Session (Making

Scheme).
HND II : Urban and Regional Planning Department
Course Title: URBANECONOMICS
Course code: URP 220
Question 1.(a) Explain Economic base Theory

Answer:

Economic-base concepts originated with the need to predict the effects of new economic
activity on cities and regions. Say a new plant is located in our city. It directly employs a
certain number of people. In a market economy these employees depend on others to provide
food, housing, clothing, education, protection and other requirements of the good life. The
question which city planners and economists need to answer, then, is "what are the indirect
effects of this new activity on employment and income in the community?" With these
estimates in hand, we can work toward planning the social infrastructure needed to support
all of these people.

Central concept of the economic base model is the duality of regional economic activity; its
fundamental behavioural assumption is that non-basic economic activity depends on basic
economic activity. In this perspective, external demand for a region's exportable goods and
services injects income into the regional economy, in turn augmenting local demand for non-
exportable goods and services. The model assumes that the income injected into the regional
economy and the accompanying potential for developing locally oriented, non-basic
industries are in proportion to the size of a region's export base. (10marks)

Question 1.(b) State the Assumptions of Economic Base Theory

Answer:

Assumptions of Economic Base Theory:

(1) That exports are the sole source of economic growth (investment, government
spending, and household consumption are ignored); (2marks)

(2) That the export industry is homogeneous (i.e., that an increase or decrease of one export
does not affect another); (2marks)

(3) The constancy of the export/service ratio; (2marks)

(4) That there is no inter-regional feedback; and (2marks)

(5) That there is a pool of underutilized resources(2marks) .

TOTAL=(20marks)
Question 2 List and explain the 4 hierarchy of settlement. …………………….(20marks)

Answer:

Settlement Hierarchy refers to the way that settlements are ranked and organized in terms of
size and function. Typically, settlements are arranged in a hierarchy from largest to smallest,
with the largest settlements at the top and the smallest settlements at the bottom. .(2.5marks)

Isolated dwelling
An isolated dwelling is the smallest but most common form of settlement.
Found at the base of the settlement hierarchy, the isolated dwelling is a
settlement with only a handful of households. Isolated dwellings have little
need for services, and at times have none at all. (2.5marks)

Hamlet
The hamlet is a bit larger yet not as common as the former. Although the
definition of a hamlet varies per country, in general, hamlets have a population
of 100 people or less. Hamlets are usually unincorporated communities found
in rural areas or as the component of a municipality or larger settlements.
They may also offer only a few basic services. (2.5marks)

Village
Essentially, a village is a hamlet with a few hundred more people and with a
larger area. Villages are clustered human settlements or communities often
inhabited by a number ranging from a few hundred to a thousand. This larger
population permits villages to have basic services such as churches, gas
stations, and post offices. (2.5marks)

Small town
Small towns are settlements much larger than villages. It is common for small
towns to have populations that fall within the range of 1,000 to 20,000
inhabitants. These settlements are equipped with a number of services
sufficient enough to fulfil their inhabitants’ basic needs. The people that live in
small towns rarely need to leave the settlement to look for other services.
Services such as grocers, restaurants, and basic stores can most usually be
found in small towns. Around the world, the strict definition of a town
according to its size varies from country to country. (2.5marks)

Large town
When a town’s population exceeds 20,000 inhabitants, it is considered a large
town. In comparison to a small town, a large town’s greater number of
residents allows it to have a greater variety of services. (2.5marks)

City
A city is a large and permanent human settlement. Cities do not have a
minimum size nor population, however, they usually have around 100,000–
300,000 inhabitants. Cities are governed by a major, and more often than not,
a majority of the important administrative offices can be found in cities.
(2.5marks)

Conurbation
A conurbation is a collection of two or more large cities and their suburbs. The
cities that belong to conurbations are strongly related to one another.
Conurbations commonly have populations of 1–3 million people. Major
examples of conurbations are found in the Low Countries, Great Britain,
Germany, and Japan(2.5marks)
Question 3. (a) State 5 of Crystaller’s Central Place Theory Assumptions

Answer:

Assumptions:

Chrystaller made a number of assumptions such as:

All areas have:

i an isotropic (all flat) surface (4marks)

ii an evenly distributed population (4marks)

iii. evenly distributed resources (4marks)

iv similar purchasing power of all consumers and consumers will patronize nearest market

(4marks)

v. no excess profits (Perfect competition) consumers are of the same income level and same
shopping behavior (4marks)

vi.Uniform transport network that permitted direct travel from each settlement to the other

vii.Transport cost is proportional to distance traveled in example, the longer the distance
travelled, the higher the transport cost.

TOTAL=(20marks)

Question 4.(a) What is cost benefit analysis

Answer: Cost Benefit Analysis is qualitative analytical tool used to determine the worth of a
project, programme or policy. It is used to estimate the value of government project since the
intention of the government in embarking on such project might not necessarily be financial,
but political. As a result, government enterprises may provide certain services to all
consumes at a charge below the market price(cost) while government prepares to subside
such.CBA draws on the concept of capital budgeting and incorporates environmental
problems, opportunity cost and transfer prices(subsidy).As a result,CBA considers all the
consequences that may arise from embarking on such project.Specifically,CBA is used to
asset in making judgement for the apprising available options. It, therefore, aids decision
makers on the allocation of resources as it identifies and quantifies the cost and benefits of
programmes, projects or policy and converts available data to manageable information.
TOTAL=(20marks)
] Question 5.(a)Explain Welfare Economics in relation to physical planning.

Answer:

Welfare economics is originally a branch of economics that focuses not only on efficiency,
but also improving human welfare and social conditions. Often known as economics with a
heart, it is done principally through the optimum distribution of wealth –i.e the best
allocation of resources.

Welfare economics looks at how different types of economic activity and various ways of
allocating scarce resources impact the well-being of specific countries, regions, and people.

Put simply, welfare economics is a subfield of economics that focuses on how resources are
allocated to maximize human welfare.

1. The concept of welfare economics is also applied in Urban and Regional planning.
Urban planning means the scientific, aesthetic, and orderly disposition of land
resources, facilities and services with the view to securing the physical, economic and
social efficiency, health and well-being of urban communities. The goal of urban
planning is to ensure welfare of the people and their communities by creating
convenient, equitable, healthful, efficient and attractive environment for present and
future generation (Adenda21). For example:

a.Housing – High income but unaffordable housing diminishes economic welfare.

Physical planning creates room for affordable housing i.e. good, cheap housing is
essential to economic welfare. (2marks)

b. Environment – economic growth can cause increased pollution, which damages

health and living standards. Planners suggest air, water and land pollution mitigation
measures. (2marks)

c. Life expectancy and quality of life –planners propose heath care areas (facilities) to
enable people have access to better healthcare services. (2marks)

d. Creates parks and recreation area for Leisure (2marks)

e. Planners suggest maintenance and use of natural resources and habitats in the
environment.
(10marks)

(b) What is a public good?

Answer:

A public good is commodity whose use by one agent does not preclude its use by other
agents. It is thus non depletable in the sense that consumption by an individual does not affect
supply available for other individuals. In contrast, a good is private or depletable,if for each
unit consumed by one individual, there is one unit less available for other individuals.
Therefore, a public good can simply be define as one which is not subject to exclusion and is
subject to jointness in its consumption or us (Ostrom and Ostrom,1999) (5marks)
Infrastructure, services, amenities and facilities are public goods or public provided goods
whose provision and management rest upon the state and public sectors.Pysical planning and
landuse are concerned with the efficient allocation of resources(land) towards accelerating
development with the interest of the people and the environment in mind. Therefore, it is
undeniable that most of the activities of urban and regional planners revolve around the
provision of public goods. Planners are drivers of public interest. ) (5marks)

TOTAL=(20marks)

Question 6(a) Explain the term Housing Market.

Answer:

The Housing Market refers to the supply and demand for houses, usually in a particular
country or region. A key element of the housing market is the average house prices and trend
in house prices. (6marks)

The Housing Market includes the following features

 Supply of housing – quantity of housing stock

 Demand for housing
 House prices
 Rented sector. Buy to let investment and demand from tenants
 Government intervention in the Housing market
 Interest rates – which influence cost of variable mortgages
 State of mortgage industry – determines whether people are eligible for mortgages
 Economic growth, incomes and unemployment rates
 Population and demographic trends (9marks)

(b)State the involvement of government and its effect in the operation of the
Housing Market.

Answer:

Government involvement in the housing market is via the development of ‘Housing Policy
and Programmes’.

Sanusi (1997) define Housing Policy as a package containing a nations housing gaols and set
of programmes by which the gaols could be achieved. It is an articulated package for housing
provision and maintenance. It is an official tool for satisfying the needs of the people.

For example, it should define the governments stand on land issues, rural and urban housing
construction industries, finance programme, institutional framework for the implementation
of policy and so on. Examples of some of them are ;the National Housing Policy of 1991,
2006,and National Housing Policy of 2006 that was reviewed in 2012. (5marks)
Housing Programmes are specific strategies usually initiated to increase the housing stock in
a country. They are instruments for implementing housing policies. Examples are
i. Direct construction

ii.Sites and Services Scheme (5marks)

TOTAL=(20marks)