week 8 Flashcards
what is industrial location - geometrical representation
with one raw material the location choice defines a line (segmetn) between the source and the marker
with two raw materials the location choice defines a triangle whose vertices are the material sources and markets
MI will determine corner or intermediate solutions
describe corner solution
one material exceeds sum of all others
describe intermediate solutions
no single material (or final product) exceed all others
1 raw material: line
corner solution
intermediate solution
at end points or along line
2 raw materials : triangle
corner solution
intermediate solutions
at vertices or alone triangle perimeter
geometrical representation advanced power struggle
additional materials are represented as a more complex polygon
determination of optimal intermediate location is struggle between corners of the polygon
localized production factors
land, raw materials
labour
capital
production factor subsitution
isoquant/isocost
technology
mobility
where do heavy inputs locate
locate near the source or by a source of transportation (railway)
further considerations of industrial location theory
cost of labour is not factored
industrial location vs migration
skilled labour and education
capital is not counted
delocalization adn outsourcing
how is transportation cost formed
by termina cost and haul cost
what is terminal cost
laoding, unloading, transshipping
what is haul cost
moving freight over distance
terminal vs haul costs and their ratios depend on…
transportation mode, highway, raildroad etc
unitary transport cost curve
per mile transport, inversly proportional to distance