Suppose two counties A and B are identical except for the fact that country A is located on an ocean coast while country B is land-locked. Which country will develop faster?

1. Suppose two counties A and B are identical except for the fact that country A is located on an ocean coast while country B is land-locked. Which country will develop faster?

2. Write down the assumptions in the Von Thunen model. Discuss why we need these assumptions.

3. Describe the four concentric rings of agricultural activity generated by the Von Thunen model.

4. Farmers sell their produce to the city and the city sells their non-farm goods (such as Machines, fertilizers, medical care) to the farmers. Why transport cost is more important to farm-goods than non-farm goods?

5. Suppose there are three regions: City, Rural, and Remote Rural. Where ‘Rural’ region is located between the City and Remote Rural. The Von Thunen model says that Rural regions will produce milk, fruits, and vegetables which typically defies Engel’s law. Based on this information, discuss why Remote Rural may forever be trapped in poverty if the transport cost problem is not solved.

6. Infrastructure development is considered the backbone of the development process. That is why international bodies like the World Bank, and Asian Infrastructure and Investment Banks give loans for developing the infrastructure. What are the typical examples of infrastructures and how do they lower transport costs?

7. Why doesn’t the World Bank pay loans for subsidizing gas costs? Because decreasing gas costs will decrease the transport costs and hence help the development process.

Last Completed Projects