ECONOMICS
ECONOMIC DEVELOPMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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income taxes; mortgage costs on a building; depreciation cost
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cost of power; union labor contracts; employees’ fringe benefits
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least cost transportation; adjusting location to labor costs; economies of agglomeration
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friction of distance; time-space compression; vertical integration
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Detailed explanation-1: -Weber’s Least Cost Theory attempts to describe and predict the location of manufacturing industries based on three factors: transportation costs, labor cost, and the benefit of agglomeration (clustering with similar, interdependent businesses).
Detailed explanation-2: -Weber’s least cost theory denotes that industry is situated within the area where the costs of transporting raw materials and the final output are minimal. Therefore, in this theory, weber attempted to the role of transportation costs when choosing the location of an industry.
Detailed explanation-3: -Weber’s theory, called the location triangle, sought the optimum location for the production of a good based on the fixed locations of the market and two raw material sources, which geographically form a triangle.
Detailed explanation-4: -According to Alfred Weber’s theory of industrial location, three factors determine the location of a manufacturing plant: the location of raw materials, the location of the market, and transportation costs.