AP Services, Central Place Theory & the Informal Economy 2 — Questions and Answers
Question 1: Bid-rent theory explains that land values and use intensity change based on:
- Population density relative to the national average
- Distance from the central business district (CBD) (Correct answer)
- Climate and environmental conditions of a location
- Age and structural quality of buildings in an area
Correct answer: Distance from the central business district (CBD)
Bid-rent theory shows that different land users (commercial, residential, agricultural) compete for land, with values and use intensity decreasing predictably with distance from the CBD.
Question 2: Which economic sector includes knowledge-based activities such as research and development, information technology, and financial services?
- Primary sector
- Secondary sector
- Tertiary sector
- Quaternary sector (Correct answer)
Correct answer: Quaternary sector
The quaternary sector encompasses knowledge-based activities including R&D, information technology, education, media, and financial services—distinguished from basic service provision.
Question 3: The quinary sector of the economy refers to activities performed by:
- Low-wage service workers in retail and hospitality
- Manufacturing floor supervisors and quality control staff
- Top decision-makers including senior executives and government officials (Correct answer)
- Agricultural specialists and rural development experts
Correct answer: Top decision-makers including senior executives and government officials
The quinary sector represents the highest level of decision-making in an economy, including senior government officials, top corporate executives, and leading research scientists.
Question 4: Export-base (economic base) theory divides urban economic activities into which two categories?
- Formal and informal sectors
- Basic and non-basic industries (Correct answer)
- Primary and secondary sectors
- Public and private enterprises
Correct answer: Basic and non-basic industries
Export-base theory divides urban economies into basic industries (which export goods/services and import money into the region) and non-basic industries (which serve local residents' everyday needs).
Question 5: A primate city is best characterized by:
- Having the largest absolute population of any city in the world
- Being disproportionately large compared to other cities in the same country (Correct answer)
- Having the most economically diversified economy in its region
- Being located at the precise geographic center of its country
Correct answer: Being disproportionately large compared to other cities in the same country
A primate city is at least twice as large as the next largest city and dominates the country's political, economic, and cultural life, common in developing countries.
Question 6: The rank-size rule states that the population of a city is:
- Equal to its population rank multiplied by the primate city's population
- Inversely proportional to its rank in the national urban hierarchy (Correct answer)
- Directly proportional to its distance from the national capital
- Determined by its physical land area in square kilometers
Correct answer: Inversely proportional to its rank in the national urban hierarchy
The rank-size rule proposes that a city's population is inversely proportional to its rank: the 2nd city is 1/2 the size of the largest, the 3rd is 1/3 the size, and so on.
Question 7: Special economic zones (SEZs) are primarily designed to:
- Protect domestic industries from cheaper foreign competition
- Attract foreign investment through relaxed regulations and tax incentives (Correct answer)
- Relocate government administrative functions away from capital cities
- Preserve traditional cultural heritage in rapidly urbanizing areas
Correct answer: Attract foreign investment through relaxed regulations and tax incentives
Special economic zones are designated areas with more liberal economic laws—reduced tariffs, tax holidays, relaxed labor rules—designed specifically to attract foreign direct investment and boost exports.
AP Services, Central Place Theory & the Informal Economy 2
Bid-rent theory explains that land values and use intensity change based on: