(2) Von-Thünen Model II Suppose a certain good (e.g., wheat) can only be sold at
ID: 1138272 • Letter: #
Question
(2) Von-Thünen Model II Suppose a certain good (e.g., wheat) can only be sold at a central market place M All producers that do not produce it at M need to haul it there and will incur transportation cost. Consider the one directional von-Thünen model to the right only a) People are willing to pay $6 for the product; marginal production cost m equals 2. If the maximum distance at which people grow wheat is x*-16, what is marginal transportation cost t? b) If wheat production were equally distributed over the entire distance between M and x*, you could calculate the sum of all costs, i.e, production w/o FC, transportation cost and rent as the areas of your chart; see the sketch below. For the data given at (a), calculate the size of these cost components. Rent Transp Cost Production Cost (c) Now assume a total cost function with economies to distance in transportation cost: TC 2 +x0.5. Further assume that WTP remains at 6. Like at (b), calculate x*, production cost, transportation cost and rent. (Hint: You will need basic integral calculus for this. You can always check Google)Explanation / Answer
The Von Thunen model of agricultural land use (also referred to as region concept) was created through the farmer, landowner, and novice economist Johann Heinrich Von Thunen (1783-1850) in 1826 in a e-book referred to as "The remoted State," but it wasn't translated into English until 1966. Von Thunen's mannequin used to be created earlier than industrialization and is centered on the next limiting assumptions:
the city is placed centrally inside an "isolated State" that is self-enough and has no external influences.
The isolated State is surrounded through an unoccupied desert.
The land of the State is thoroughly flat and has no rivers or mountains to interrupt the terrain.
The soil excellent and climate are constant throughout the State.
Farmers in the remoted State transport their own items to market through oxcart, throughout the land, directly to the important metropolis. Thus, there are not any roads.
Farmers act to maximise earnings.
In an isolated State with the foregoing statements being actual, Von Thunen hypothesized that a pattern of rings across the metropolis would advance based on land price and transportation price.
The four Rings
Dairying and intensive farming occur in the ring closest to the town. Due to the fact greens, fruit, milk, and other dairy merchandise need to get to market quickly, they would be produced virtually town. (remember, humans did not have refrigerated oxcarts!) the first ring of land can be more high priced, so the ag merchandise would have got to be totally priceless ones and the fee of return maximized.
Timber and firewood could be produced for gasoline and constructing materials within the 2d zone. Before industrialization (and coal vigour), wood was once a very essential fuel for heating and cooking. Wooden may be very heavy and intricate to transport, so it's placed as virtually the town as possible.
The 1/3 zone contains broad area crops similar to grains for bread. On the grounds that grains last longer than dairy merchandise and are so much lighter than fuel, reducing transport expenses, they are able to be located farther from the town.
Ranching is placed in the final ring surrounding the critical metropolis. Animals can be raised a long way from town because they are self-transporting. Animals can walk to the valuable city on the market or for butchering.
Beyond the fourth ring lies the unoccupied desert, which is simply too exceptional a distance from the central city for any variety of agricultural product since the quantity earned for the product does not justify the bills of manufacturing it after transportation to town is factored in.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.