review of microeconomics for sullivan t1_notes_intro

Economics 312 Urban Land Economics

Introduction Martin Farnham

University of Victoria Fall 2009

Econ 312--Farnham 2

Course logistics

Professor: Martin Farnham [email protected] BEC 354 Office Hours: Tuesdays 1:00-2:30

or by appointment

TA: Daniel Sharratt [email protected] Office Hours: Wednesdays 1:00-2:00pm location TBA

Econ 312--Farnham 3

Course logistics (cont)

•  Evaluation –  Midterm 1, 25% (Oct 6, in class) –  Midterm 2, 25% (Nov 6, in class) –  Final Exam 50% (details TBA)

•  Text: O’Sullivan “Urban Economics” 7th Ed •  Assignments

–  Ungraded problem sets –  Readings from text or elsewhere

Econ 312--Farnham 4


•  Attendance –  If you don’t sign the attendance sheet in the first

three lectures, automatically dropped (else notify me of intent to stay in course)

–  Technically attendance not required; however, strongly recommended.

–  You are responsible for anything you miss; if you miss a lecture ask someone else what you missed

–  Lecture notes posted on Blackboard, but not necessarily complete https://blackboard.uvic.ca/webct/logonDisplay.dowebct

Econ 312--Farnham 5


•  Office hours –  Use them!!

•  Learning in this course –  Do readings –  Keep good notes –  MOST importantly, do problem sets carefully and

thoroughly –  Think!

•  See course outline for additional details

Econ 312--Farnham 6

A note on email etiquette

•  Please don’t email me about –  Information available elsewhere (course website,

course outline, etc.) –  What you missed if you skipped a lecture –  What’s going to be on an exam –  Things you could ask me in office hours –  I reserve the right to ignore emails that I deem

inappropriate •  Please use the standard letter format

–  Sign your email –  Don’t use text message abbreviations (I won’t

understand them!)

Econ 312--Farnham 7

What is this course about?

•  Cities are centers of innovation, learning, and culture and are exciting places to live

•  Economics tends to ignore spatial aspects of production

•  Urban economics studies location choices and considers why economic activity is concentrated in certain locations.

•  Addresses a number of questions

Econ 312--Farnham 8

Questions addressed by Urban Economics

•  Why do cities form and what determines their location, size and structure?

•  What are the causes of urban growth and decline and is there a role for policy?

•  What determines the price of land? – What effect does the price of land have on

other markets (e.g. financial markets!) •  What drives neighborhood segregation?

Econ 312--Farnham 9

Questions addressed by Urban Economics (cont)

•  What is the motivation for zoning and land-use restrictions?

•  What causes traffic congestion and what can be done to alleviate it?

•  Why are crime and poverty concentrated in cities?

•  Why is housing different from other goods? •  What is the role of local governments in urban

and housing policy?

Econ 312--Farnham 10

Review of Microeconomics •  Reading for Micro Review

–  Your principles of micro text and/or notes –  O’Sullivan appendix (starts p367)

•  Analyzing market outcomes in urban settings with an interest in policy that will correct market failures when such failures occur

•  Primary questions throughout: –  To what outcomes do markets lead? –  Under what circumstances are these outcomes desirable?

–  If markets outcomes are undesirable, what would be the desirable outcome? What is the correct policy response?


Review of Microeconomics •  Analyzing what happens involves positive analysis

•  Terms desirable and undesirable imply we are also interested in normative analysis.

•  Positive analysis involves asking what an outcome will be under certain circumstances: –  Ex: in equilibrium, how far will people commute to work?

•  Normative analysis involves asking questions about what outcomes we would like to see. (what should be) –  Ex: what is the right (socially optimal) distance from home to

work?

•  Points to the need for a normative criterion by which to judge outcomes as “good” or “bad”.


Review of Microeconomics •  Normative criterion we use in economics is typically that of

economic efficiency.

•  Important to keep in mind that economic efficiency

–  has utilitarianism as its philosophical base –  says nothing (much) about fairness or equity –  is only one of many criteria that we can (should?) use to

judge market outcomes.

•  With these caveats in mind, in this class we will (usually) judge outcomes in terms of whether or not they are economically efficient. –  Normative statements like “outcome X should happen”

should be read as shorthand for “outcome X should happen if we are using economic efficiency as the sole criterion for decision-making.”

13

Review of Microeconomics •  Economic efficiency defined:

–  An outcome is efficient if it maximizes net benefits, where net benefits are equal to total benefits minus total costs.

•  Tells us that, at its core, the analysis of economic efficiency is simply cost-benefit analysis.

•  We will be analyzing efficiency in a variety of contexts, such as: 1.  What is the efficient level of provision of a public service?

•  Ex: what is the efficient level of policing? 3.  Should we undertake a particular project (binary decision-

making)? •  Ex: should Victoria build a light-rail transit system?

5.  How should we allocate a scarce resource across competing uses? •  Ex: how much land on the Saanich Peninsula should be used

for residential building vs. agriculture vs. public parks?


Review of Microeconomics •  We will focus on answering questions such as these by using cost-

benefit analysis to identify the outcomes that make net benefits as large as possible.

•  Important point: we need to make sure we have correctly identified and measured all of the costs and benefits associated with a given activity/outcome.

•  An alternative characterization of efficiency (that we may pick up on at various points throughout the term):

–  An outcome is efficient if it is impossible to come up with an alternative outcome in which at least one person can be made better off without any one person being made worse off.

•  Although it may not be immediately obvious, we will see that this characterization of efficiency will be satisfied if net benefits are maximized.


Review of Microeconomics •  In order to answer normative questions such as those posed

above, we first need to understand how to answer positive questions.

–  For instance, we need to understand what market outcomes look like, in order to work out whether they are desirable (efficient).

•  This means we need to recall some basic ideas we learned in principles of microeconomics.

•  Specifically, we want to understand: 1.  How consumers decide what goods to buy (demand). 2.  How producers decide what goods to produce (supply). 3.  How markets bring producers and consumers together

(equilibrium).

•  Once we understand this, we can assess whether consumers and producers act in such a way as to achieve an economically efficient outcome.


Review of Microeconomics 1.  Review of Demand.

•  Three areas to cover on the demand side: i.  Interpreting an individual consumer’s demand curve ii.  Measuring consumer well-being using the demand curve iii.  Deriving aggregate demand from individual demand


Review of Microeconomics: Demand i.  Interpreting an individual’s demand curve

•  Recall that a demand curve maps out a relationship between price and quantity.

Price (P)

Quantity (Q)

Demand curves usually slope downwards: known as the “law” of demand

while on the vertical axis we are measuring the price per unit (P), in some form of currency (dollars, cents etc)

Remember, on the horizontal axis we are measuring units of the good consumed (Q),

How to interpret this demand curve? Two interpretations, each of which will be useful, depending on the context.

Demand Curve (D)


Review of Microeconomics: Demand

•  The first interpretation of the demand curve is probably the most familiar to you:

P

Q

Interpretation 1: the D curve tells us how many units of a good a consumer wishes to buy in total, at a given price per unit for the good.

For instance, the D curve tells us that if the price per unit is P1, then the consumer would like to buy Q1 units.

We can think of this interpretation as reading the D curve horizontally: that is, if we plug in values for P, we get out values for Q.

D

P1

Q1

etc. Q2

P2

19


•  The second interpretation of the demand curve may be less familiar to you:

P

Q

Interpretation 2: the height of the D curve at any given point tells us how the consumer values additional units of the good.

For instance, the D curve tells us that if the consumer currently has Q1 units of the good, then a small increase in quantity would be worth P1 per unit to the consumer.

D

P1

Q1 etc. Q2

P2

We can think of this interpretation as reading the D curve vertically: that is, if we plug in values for Q, we get out values for P. We will elaborate on this interpretation by use of an example.



Example: Suppose that demand is given by Q = 5 - (1/2)P.

P($)

Q

From the D function, if P=$10, Q=0 will be demanded. But if P = $8, Q = 1 will be demanded.

consumer’s maximum willingness to pay for the first unit is greater than $8, but less than $10.

D

10

5

So we know that the maximum willingness to pay for the first unit is something less than $10. Can we do better than this?

Area of the rectangle ($10) thus gives an upper bound on consumer’s willingness to pay for the first unit. 1

8


Review of Microeconomics: Demand Now consider smaller changes in P. Say P from $10 to $9 so that Q from 0 to 0.5.

P($)

Q

Consumer did not buy the first half unit when it cost $5, but does when it costs $4.50.

consumer’s maximum willingness to pay for this first half unit is something less than $5.

D

10

0.5

Now suppose P from $9 to $8, so that total Q from 0.5 to 1.

Consumer did not buy the second half unit when it cost $4.50, but does when P falls.

1 5

9 8

consumer’s maximum willingness to pay for this second half unit is something less than $4.50. This tells us that the consumer’s maximum willingness to pay for the first unit is in fact something less than $9.50 (as opposed to $10).

22

Review of Microeconomics: Demand We could consider even smaller changes in prices and quantities.

P($)

Q

For instance we could now lower the price in $0.50 increments, rather than in $1.00 increments.

Doing this allows us to see that the consumer’s maximum willingness to pay for the first unit is something less than $9.25.

D

10

9

8

0.5 1 5

In the limit, as we consider smaller and smaller price changes, what we are doing here is calculating the area under the demand curve between Q=0 and Q=1.

This area tells us the exact maximum willingness to pay by this consumer for the first unit of the good. In this case, the area of that trapezoid is equal to $9. The consumer is willing to pay at most $9 for the first unit.


Review of Microeconomics: Demand By the same logic, the area under the demand curve as we increase Q from 1 to 2 units tells us the maximum willingness to pay for the second unit.

P($)

Q

In this case, that area equals $7.

10

1 5

Indeed, the area under a D curve between any two quantities tells us the maximum willingness to pay for that additional quantity.

In the limit, as we consider tiny tiny increases in Q, the base of the trapezoid goes to zero, and the willingness to pay (per unit) for these tiny tiny increases in Q is just equal to the height of the demand curve.

2

6 If we consider very small increases in quantity, than the trapezoid representing the willingness to pay has a very small base.

8


Review of Microeconomics: Demand This is the logic behind the second interpretation of the demand curve, that the height at any point tells us how consumers value small Q.

P($)

Q

As we have seen, this is equivalent to telling us how much the consumer is willing to pay for small Q.

When we are thinking about the D curve in this way, we will refer to it variously as the:

We can also think about this as telling us how much additional benefit a consumer would get from a small Q.

1.  Marginal Value (MV) curve 2.  Marginal Willingness to Pay (MWP) curve 3.  Marginal Benefit (MB) curve

Note that these terms are equivalent!


Review of Microeconomics: Demand ii.  Measuring consumer well-being using the demand curve.

P($)

Q

1st interpretation of D curve: tells us Q demanded at a given P.

But, how much did consumer actually have to pay for Q1?

2nd interpretation of D curve: area under the D curve measures consumer’s willingness to pay for Q1 units.

Definition: consumer surplus (CS) = what a consumer is willing to pay minus what they have to pay.

P1

Q1

Expenditure (price times quantity) given by area P1Q1.

consumer willing to pay more than she has to pay.

Difference between willingness to pay and expenditure measures consumer well-being.

In the diagram above, the CS from buying Q1 units at P1 per unit is equal to the triangle A.

A


Topic 1(b): Review of Consumer Theory iii.  Deriving aggregate demand from individual demand

P

QA

Suppose two individuals - A and B - each with D curves drawn below.

At P1, A demands Q1A and B demands Q1

B.

P1

QA1

We are horizontally aggregating individual demands to get aggregate demand.

DA

QB

QB1

DB

QA1+QB

1 QA2 QB

2 QA2+QB

2

Aggregate D

P2

Aggregate demand at P1 therefore equals Q1A + Q1

B.

At P2, A demands Q2A, B demands Q2

B, and agg. D = Q2A

+ Q2B.

P


Topic 1: Introduction and Review 1.  Review of Supply.

•  Three areas to cover on the supply side: i.  Interpreting an individual producer’s supply curve ii.  Measuring producer well-being using the supply curve iii.  Deriving aggregate supply from individual supply


Topic 1: Introduction and Review: Supply i.  Interpreting a firm’s supply curve

•  Recall that a supply curve maps out a relationship between price and quantity.

Price (P)

Quantity (Q)

Supply curves usually slope upwards: known as the “law” of supply

i.e., firms that take the prices of output and inputs as given.

NB: Throughout this class we will only be looking at the supply behavior of competitive firms.

How to interpret this supply curve? Like D curve, there are two interpretations of the S curve.

Supply Curve (S)


Topic 1: Introduction and Review: Supply

•  The first interpretation of the supply curve is (again) probably most familiar:

P

Q

Interpretation 1: S curve tells us how many units of a good a producer wishes to sell in total, at a given price per unit for the good.

If the price per unit is P1, then the firm would like to sell Q1 units. etc, etc.

We can think of this interpretation as reading the S curve horizontally: that is, if we plug in values for P, we get out values for Q.

S

P1

Q1


•  The second interpretation of the supply curve should also be (relatively) familiar:

P

Q

Interpretation 2: the height of the S curve at any given point tells us how much additional units of the good cost to produce.

i.e., the supply curve is also a Marginal Cost (MC) curve.

If the firm is currently producing Q1 units of the good, then a small increase in quantity would cost P1 per unit to produce.

S P1

Q1

We can think of this interpretation as reading the S curve vertically: that is, if we plug in values for Q, we get out values for P. Again, useful to work through an example.



Example: Suppose that supply is given by Q = P - 5.

P($)

Q

From the S function, if P=$5, Q=0 will be supplied. But if P = $6, Q = 1 will be supplied.

firm’s cost of supplying that first unit (the MC of that unit) is somewhere between $5 and $6.

S

And area under S curve from Q=1 to Q=2 equals cost of producing 2nd unit.

And area under S curve from Q=0 to Q=2 tells us how much the firm’s costs increase going from Q=0 to Q=2.

Turns out that the exact cost of producing this first unit = area under the S curve between Q=0 and Q=1.

1

5

6

7

2

$5.50 $6.50

$12



•  Area under S curve up to a given Q actually tells us the Variable Cost (VC) of producing that Q.

•  Recall that a firm’s Total Costs (TC) have 2 components: TC = Fixed Costs + Variable Costs

= FC + VC.

•  By definition, FC don’t change as Q changes, while VC do.

•  So MC = ΔTC/ΔQ = Δ (FC+VC) /ΔQ = ΔVC /ΔQ.

area under the S curve up to a given Q = MC of 1st unit + MC of 2nd unit + MC of third unit etc. etc.

•  And adding up MCs is the same as calculating VC.


Topic 1: Introduction and Review: Supply ii.  Measuring producer well-being using the supply curve.

P($)

Q

1st interpretation of S curve: tells us Q supplied at a given P.

If producer sells Q1 units at P1 per unit, then Total Revenue (TR) received = area of rectangle P1Q1.

2nd interpretation of S curve: area under S curve measures VC of producing Q1 units.

Definition: producer surplus (PS) = TR - VC.

P1

Q1

producer receives revenue greater than VC.

Difference between TR and VC provides a measure of producer well-being.

In the diagram above, the PS from selling Q1 units at P1 per unit is equal to the triangle A.

A



ii.  Measuring producer well-being using the supply curve.

•  More common measure of producer well-being is profit (π). –  What is the relationship between PS and π?

•  Recall:

PS = TR - VC; and

π = TR - TC π = TR - VC - FC

PS π = PS - FC

or PS = π + FC.



•  Recall that CS measures the NB to consumers from consuming.

•  Similarly, we can think about PS as telling us about the NB to producers from producing.

•  That is, tells us how much better off the firm is by choosing Q>0.

•  If Q = 0, TR=0 and TC=FC. π = -FC.

•  If Q>0, TR>0 and TC=FC+VC. π = PS - FC.

•  Tells us that maximizing π is equivalent to maximizing PS.

•  So even though π is the “true” measure of firm well-being, we can use PS instead.

π as Q = PS as Q


Topic 1: Introduction and Review: Supply iii.  Deriving aggregate supply from individual firm supply

P

QA

Suppose two firms - A and B - each with S curves drawn below.

At P1, A supplies QA1 and B supplies QB

1.

P1

QA1

We are horizontally aggregating individual firm supplies to get aggregate supply.

SA

QB

QB1

SB

QA1+QB

1 QA2 QB

2 QA2+QB

2

Aggregate S

P2

Aggregate supply at P1 therefore equals QA1 + QB

1.

At P2, A supplies QA2, B supplies QB

2, and agg. S = QA2 + QB

2.


Topic 1: Introduction and Review: Supply iii.  Deriving aggregate supply from individual firm supply

P

QA

Example: suppose identical supplies given by Q = 1/2P.

At P = 0, each supplies 0 units. So agg. S = 0. 2

In fact, agg. S = QA + QB at any P so agg. S = 1/2P + 1/2P = P.

SA

QB

2

SB

4

Aggregate S

4

At P = 4, each supplies 2 units. So agg. S = 4. etc.

QA +QB



Exercise: For each of the following individual firm supplies, derive an expression for aggregate supply. Draw a diagram illustrating aggregate supply.

a)  QA = P, QB = P b)  QA = P, QB = 2P c)  QA = P, QB = 4 - P.

Hint: be very careful if individual S curves have different vertical intercepts. Not just a case of adding the equations together.


Topic 1: Introduction and Review •  Final topic in Intro/Review: Equilibrium.

–  Bringing both sides of the market together.

•  Definition of equilibrium: –  a state of balance or rest; –  a state where there is no tendency for change.

•  In our supply and demand model, an equilibrium is where: 1.  Consumers are choosing the Q that makes them happiest,

given P. (Consumers choose Q to set MB=P) –  i.e., maximizing CS.

2.  Producers are choosing the Q that makes them happiest, given P. (Producers choose Q to set MC=P) –  i.e., maximizing PS.

3.  Prices are such that consumer and producer behavior are consistent. –  Usually means supply equals demand. (Qs=Qd)


Topic 1: Introduction and Review: Equilibrium •  Example: take the S and D curves illustrated below

Q1

P1

P

Q

S

D

At price P1, consumers want to buy Q1 units, producers want to sell Q1 units consumer and producer behavior is consistent.

If P > P1, S > D and there would be pressure on P to fall.

At equilibrium of P1 and Q1, NB to consumers = CS = area A and NB to producers = PS = area B.

Agg NB = CS + PS = A + B

A

B

Note that area A is aggregate CS and area B is aggregate PS. That is, CS is sum of all individual consumers’ CS and PS is sum of all individual producers’ PS.

Topic 1: Introduction and Review: Equilibrium •  One very important thing to note: aggregate NB always the same

if Q the same, no matter what happens to P.

•  Another way of saying this is that aggregate NB function only of total Q, while the distribution of NB depends on P.

Q1

P1

P

Q

S

D

Example: here equilibrium would be P1, Q1. But, if government imposes a quota at Q2, new equilibrium would be at P2, Q2 where: CS = A PS = B + C + D

But now suppose that (instead of quota), government instead says P cannot rise above P3 (“price ceiling”). Equilibrium still Q2 but with different P. Now we have: CS = A + B + C PS = D

Agg NB = CS + PS = A + B + C + D

Q2

P2 A B C

P3 D

Agg NB = A + B + C + D Same in total, distribution different.


Topic 1: Introduction and Review Summary:

•  We have seen that (absent quotas, price ceilings etc): –  Consumers choose Q such that P = MB

•  i.e., choose to consume where P cuts D curve. •  NB to consumers = CS.

–  Producers choose Q such that P = MC •  i.e. choose to produce where P line cuts S curve. •  NB to producers = PS.

–  Producer and consumer decisions are such that S=D •  Aggregate NB = sum of individual NB •  Sum of individual NB = CS + PS (if consumers and

producers are the the only agents affected by the market).

•  Note that these are positive questions - describing the way in which markets DO work.

•  Can also ask corresponding normative questions.


Topic 1: Introduction and Review •  Normative questions of interest are:

1.  What quantity of goods should be produced? •  We know that in equilibrium Q is where S=D. •  Under what circumstances is this the “right” Q in total (the one

that maximizes NB)?

2.  Which firms should produce these goods? •  We know that in equilibrium each firm produces until P=MC. •  Under what circumstances is the the “right” Q for each firm (the

one that minimizes aggregate production costs)?

3.  Which consumers should get to consume these goods? •  We know that in equilibrium each consumer chooses Q such

that P=MB. •  Under what circumstances is the the “right” Q for each

consumer (the one that maximizes aggregate benefits from consumption)?


Topic 1: Introduction and Review •  We will focus primarily on question (1). The efficient allocation will

occur (in all cases discussed in this course) where MC=MB. –  Try to understand the intuition for this:

•  If MC>MB, this tells us the last little bit produced cost more to produce that it gave to consumers in added benefit. Society would be better off with less of the good (Q should fall).

•  If MC<MB, this tells us the last little bit produced cost less to produce that it gave to consumers in added benefit. This suggest that increasing output would raise overall well-being in society (Q should rise).

•  If MC=MB, this tells us the last little bit produced cost exactly the same amount to produce as it gave consumers in added benefit. This tells us this unit made society no better off than it was before (nor any worse off). This is the efficient point.

–  Note that MC=MB in the equilibrium diagram 4 slides back. In a well-functioning market, MC=MB at equilibrium so that the equilibrium is efficient. However, this does not always have to be the case!

•  When market failure occurs (due to something like the presence of an externality or due to monopolistic control of an industry), it may not be the case that MC=MB at equilibrium

•  In such a case, the equilibrium quantity may be different from the efficient quantity.


Brief History of Western Urbanization

•  First cities formed in fertile crescent (Mesopotamia) around 3000 BC – Followed agricultural breakthroughs

•  Domestication of grain •  Development of irrigation •  Invention of the plow

– These breakthroughs created agricultural surplus which allowed some to move into cities and become craftsmakers


First Cities

•  Early cities thought to have served defensive and religious purposes –  Food surplus required storage; centralized locations (scale

economies) easier/cheaper to defend –  Rise of large-scale religion coincides with rise of cities

•  Perhaps cities resulted from economies of scale in worship (large centralized temples, etc.)

•  Possible, however, that large-scale religion arose due to increased population density (reverse causality)


First Cities (cont)

•  Economies of scope? –  Defended temples made for convenient grain

storage site, or vice versa •  Rise of cities led to rise in military conflict

–  Increasing religious wars –  Wealth accumulation made for tempting targets –  On the other hand, defense of cities easier than

defense of dispersed sites.


Greek and Roman Cities

•  Athens, 500 BC, was trading city with population of 150,000 – Traded crafts and processed foods with

established farm and extracting colonies – Developed money – Assessed taxes on colonies to support city – Declined after war with Sparta


Greek and Roman Cities (cont)

•  Rome, 300 A.D., had population of 1 million – Established colonies throughout Europe – Fed itself from combination of trade and

taxation – Heavy reliance on tributes made it

susceptible to uprisings by colonies (barbarians)


Feudal Cities

•  Society was structured around manors with land worked by serfs

•  Small towns housed craftsmakers, exchanged crafts for local farm surplus

•  London in 1000 (a trading city) had population of only 16,000

•  Decentralized power of dispersed manors meant trade, not tribute, was source of income for cities==>competition, innovation


Mercantile Cities

•  Military advances led to consolidation of power in Europe starting in 15th cent. –  Rise of professional armies –  Advances in siege technology

•  Economies of scale in defense made large cities more sensible

•  Consolidation led to larger trading areas •  Rise of long-distance trade (with New World and

within Old World) contributed to rise of large trading centers


The Rise of Industrial Cities

•  Industrial revolution began shift from rural economy, to industrial economy – 3% of world’s population lived in cities in

early 1800s; 39% by 1970; more than 50% now.

– Driven by innovations in agriculture, manufacturing, transportation, construction

•  Agricultural innovations==>increased demand for manufactured goods


Industrial Revolution (cont)

•  Manufacturing innovations==> Increased scale economies in production –  Production moved from home to factory as relative

cost of production in factories fell, relative wage rose

•  Transport innovations==> Larger markets, greater specialization, greater productivity –  Resulting increase in income caused greater

demand for output overall


Industrial Revolution (cont)

•  Construction innovations==>higher density living –  Increased population potential of cities by

reducing commuting costs – Steel construction and elevators were key

to achieving height in buildings


Urbanization in Canada

•  Canada’s economy originally based on farming and resource extraction

•  Trading cities important – Atlantic ports: Halifax, St. John – St. Lawrence Seaway ports: Montreal,

Quebec City, Toronto •  In 1867 majority of Canadian workers

worked in agriculture/resources


Urbanization in Canada (cont)

•  Massey’s reaper and mower example of agricultural innovation, mass-produced in Toronto

•  Railroads critical to urbanization – 1860s, Quebec City and Toronto both had

about 60,000 residents – One got railroads in 1860s, one didn’t – Montreal also got railroad


Urbanization in Canada

•  In 1800, approximately 15% of European North America lived in cities (vs. 20% in Europe)

•  By 2001 2/3 of Canada’s population lived in 27 Census Metropolitan Areas (CMAs)

•  By 2001, 80% lived in clusters of 10,000 or more population


Some Current Issues in Canadian Urbanization

•  Rapid growth •  Sprawl/congestion •  Affordable housing •  Increasing fiscal difficulties

– Revenue growth to municipal governments has risen much more slowly than to Federal and Provincial governments

– Cities want bigger piece of fiscal pie

review of microeconomics for sullivan t1_notes_intro

Documents

urban economics cont

course outline

osullivan urban economics

course logistics professor

number of questions

urban settings

additional details econ

markets outcomes