ARegionwithoutCitiesThefollowing assumptions togetherpreclude urbandevelopmentEgual productivity:all residents are equallyproductive国at producing bread and shirtsall land is equallyproductive in the production of raw materials;Noeconomiesofscaleinproduction(生产的规模经济）:production is subjectto constant returnsto scaleNoeconomiesof scaleintransportation（交通的规模经济）:the transport cost perunit shipped permileisindependent ofthevolumeshipped
A Region without Cities The following assumptions together preclude urban development Equal productivity: all residents are equally productive at producing bread and shirts; all land is equally productive in the production of raw materials; No economies of scale in production(生产的规模经 济）:production is subject to constant returns to scale No economies of scale in transportation（交通的规 模经济）: the transport cost per unit shipped per mile is independent of the volume shipped
ARegionWithoutCitiesThe above assumptions eliminate the possibilityof trade and specialization because everyhousehold in the region is equally productive inproducing both goods and there are no advantagesfrom specialization, while trade takes time awayfromproductionrThere are no scaleeconomies,it wouldnot besensible to build a shirt or bread factory to produceon a large scale,andcentralized productionresulting in trade and takes time away fromproduction
A Region Without Cities The above assumptions eliminate the possibility of trade and specialization because every household in the region is equally productive in producing both goods and there are no advantages from specialization, while trade takes time away from production There are no scale economies, it would not be sensible to build a shirt or bread factory to produce on a large scale, and centralized production resulting in trade and takes time away from production
ARegionwithoutCitiesr Under these assumptions, population will bedistributed uniformly throughout the region.rIf there were a concentration of population at somelocation in the region,thehigher demand forlandat the location would bid up the land price, andhouseholds living in the concentration would beworse off than those living elsewhere.In response,the households inthe concentrationwould move to places with lower landprices.In theeguilibrium,there would be a uniform price for landand a uniform population densityThere would be costs from concentrated productionbut no benefits, so there would be no cities
A Region without Cities Under these assumptions, population will be distributed uniformly throughout the region. If there were a concentration of population at some location in the region, the higher demand for land at the location would bid up the land price, and households living in the concentration would be worse off than those living elsewhere. In response, the households in the concentration would move to places with lower land prices. In the equilibrium, there would be a uniform price for land and a uniform population density. There would be costs from concentrated production, but no benefits, so there would be no cities
TradingCities（贸易型城市）ComparativeAdvantage（比较优势）generatestradeRelaxing the assumption of Equal Productivitycomparative advantage may lead tothe development oftradingcities.Onepartof theregionmayhavecomparativeadvantages in shirt production, and the other part mayhaveacomparative advantageinbread productionIt ispossiblethat comparative advantagewill causespecialization（专业化生产）and trade
Trading Cities（贸易型城市） Comparative Advantage（比较优势） generates trade Relaxing the assumption of Equal Productivity, comparative advantage may lead to the development of trading cities. One part of the region may have comparative advantages in shirt production, and the other part may have a comparative advantage in bread production. It is possible that comparative advantage will cause specialization（专业化生产） and trade
The South hascomparativeTrading Citiesadvantage inbread while theTABLE2-1ComparativeAdvantageNorth hasOpportunity CostOutput per HourcomparativeSouthNorthSouthNorthadvantage in23shirts1IshintBread611/3 laaf1loafshirts because ofShirtsloweropportunityTABLE2-2 Specialization and the Gains from TradecostsSouthNorthBreadShirtsBreadShirts-3shirts+3loves+6shirs-2loavesChangein production+6shirs-3loaves+3loaves-6 shirtsExchange 2loaves per shirt00+3shirts+1loafNeteffectofchangeinproductionandexchange
Trading Cities The South has comparative advantage in bread while the North has comparative advantage in shirts because of lower opportunity costs