Urban Economics Midterm Paper

Urban Economics Name Course Date The urban economics theories did not incorporate the energy question in analysis, and many of the earliest cities were not built considering energy needs and efficiency as is the case of Portland. The oil crisis from the Middle East, and increased oil production the rising energy prices show that the city-energy relationship affects the cost of living and cost of production. This is further complicated by renewable energy being inadequate to meet energy needs coupled with population growth, especially, in the suburban areas where urban planning and land use requires meeting the energy needs of the residencies, metropolitan areas and the western party that is largely agricultural. The higher prices of energy have affected the energy intensive industries in this input and to the economy, such as farming and there will be less access to food from their neighboring farming areas. The local agricultural industry will compete with food imports as agricultural production will become less competitive and investment focus on sectors economies where less energy is required. The likely shortfall in food production will not be offset in the short-term implying higher food costs because of lower food supply and likely higher inflation. This further reduces agricultural production capacity in future, which reduces household disposable income for those depending on agriculture, tax revenues and employment. Even though consuming energy is necessary for our economic and social development, higher costs will result in reduced consumption of gasoline and electricity. The households are affected, as they face increased electricity costs and have less disposable income and tend to reduce the purchase of goods mostly from the energy-intensive industries and even others goods. This implies that there will likely be changes in consumption patterns, and the firms reassign their production, causing flows and resource unemployment, thus intensifying the effect of increase in the energy cost in the city. Consumption is a big component of the local economy, and if there is reduced consumption expenditure and higher energy costs, this will affect the economy of Portland negatively.  Price LevelAD...