Urban Economy of Developing Countries Concepts and Questions Below are fifteen concepts, 1-15, and fifteen definitions, A-O. Match each definition to its c

Urban Economy of Developing Countries Concepts and Questions Below are fifteen concepts, 1-15, and fifteen definitions, A-O. Match each definition to its concept by writing the correct letter in the left-hand margin.

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____ 1. Urban bias

____ 2. Rural-urban migration

____ 3. Agglomeration economies

____ 4. Urbanization economics

____ 5. Localization economies

____ 6. Social capital

____ 7. Congestion

____ 8. Informal sector

____ 9. Todaro migration model

____ 10. Harris-Todaro model

____ 11. Present value

____ 12. Labor turnover

____ 13. Efficiency wage

____ 14. Induced migration

____ 15. Wage subsidy

A The notion that modern-sector urban employers pay a higher wage than the equilibrium wage rate in order to attract and retain a higher-quality workforce or to obtain higher productivity on the job.

B The part of the urban economy of developing countries characterized by small competitive individual or family firms, petty retail trade and services, labor-intensive methods, free entry, and market-determined factor and product prices.

C A government financial incentive to private employers to hire more workers, as through tax deductions for new job creation.

D A theory that explains rural-urban migration as an economically rational process despite high urban unemployment. Migrants calculate (present value of) urban expected income (or its equivalent) and move if this exceeds average rural income.

E The discounted value at the present time of a sum of money to be received in the future.

F An equilibrium version of the Todaro migration model that predicts that expected incomes will be equated across rural and urban sectors when taking into account informal sector activities and outright unemployment.

G The movement of people from rural villages, towns, and farms to urban centers (cities) in search of jobs.

H Worker separations from employers, a concept used in theory that the urban-rural wage gap is partly explained by the fact that urban modern-sector employers pay higher wages to reduce labor turnover rates and retain trained and skilled workers.

I Process in which the creation of urban jobs raises expected incomes and induces more people to migrate from rural areas.

J The notion that most governments in developing countries favor the urban sector in their development policies, thereby creating a widening gap between the urban and rural economies.

K Cost advantages to producers and consumers from location in cities and towns, which take the forms of urbanization economies and localization economies.

L An action taken by one agent that decreases the incentives for other agents to take similar actions. Compare to the opposite effect of a complementarity.

M The productive value of a set of social institutions and norms, including group trust, expected cooperative behaviors with predictable punishments for deviations, and a shared history of successful collective action, that raises expectations for participation in future cooperative behavior.

N Agglomeration effects associated with the general growth of a concentrated geographic region.

O Agglomeration effects captured by particular sectors of the economy, such as finance or autos, as they grow within an area.