Read about Urban Economics; then, answer the following questions:
2. Explain the concept of comparative advantage and the role it plays in the development of trading cities. List and explain any additional economic conditions necessary for the development of trading cities. Explain what additional conditions are necessary for the development of a factory city.

3. Draw the three graphs associated with a factory town showing the firm's average cost curve, the factory's delivered cost and market area, and the town's residential limits, commuting costs, and housing costs. What happens to the town when transportation cost fall, or the production costs decrease.

4. Given a production function with increasing/decreasing (or increasing, or decreasing, or constant) returns to scale, sketch the associated total, marginal, and average cost curves, being careful to indicate the necessary relationships between the curves.

5. Using graphs, explain the role of firm profits in establishing the long run price and quantities produced by a firm. You should show how short run conditions help to establish this long run equilibrium.

6. Show how two Cournot mineral water producers use their cost and demand curves to determine their output given each others output. Show how this determines their best response curves.5. The graph below shows the size distribution of the largest 26 cities and towns in Delaware. Is this distribution unusual? Explain the economic forces that produce this kind of distribution.

7. Two firms produce a similar product and are located 20 miles apart along a linear market. They have a constant marginal and average variable cost equal to 5 dollars per unit of output. It costs one dollar to transport the product one mile. Consumers are uniformly distributed along the market. Draw a graph of the market and indicate the optimal price for each firm to charge, how much of the market each firm serves, and how much profits each firm receives. Explain how this model generalizes to a circular market with free entry and variable location. What role do profits play in establishing an equilibrium in the generalized model.

Read about Urban Economics; then, answer the following questions:...