Module: General Practice
Q143: In the context of Cluster Economics, the term "Agglomeration Economies" refers to which of the following phenomena?
✅ Correct Answer: B
Concept Definition: "Agglomeration Economies" are the benefits that come when firms and people locate near one another together in cities or industrial clusters.
Types:
Localization Economies: Benefits from firms in the same industry being close (e.g., a shared pool of specialized labor, specialized suppliers).
Urbanization Economies: Benefits from the overall size of the urban area (e.g., better roads, airports).
Relevance: This is the economic engine of a cluster.
It reduces the "Per Unit Cost" of production through shared resources (like a Common Facility Centre) and knowledge spillovers.
Types:
Localization Economies: Benefits from firms in the same industry being close (e.g., a shared pool of specialized labor, specialized suppliers).
Urbanization Economies: Benefits from the overall size of the urban area (e.g., better roads, airports).
Relevance: This is the economic engine of a cluster.
It reduces the "Per Unit Cost" of production through shared resources (like a Common Facility Centre) and knowledge spillovers.