Question

Read the passage and answer the question:
"Agglomeration economies differ between habitations of different sizes. Market towns generate scale economies in marketing and distribution of agricultural inputs and outputs. Medium-sized cities present localisation economies linked to specialisation. Larger cities create urbanisation economies due to diversity, leading to innovation. Metropolitan city regions offer the benefits of localisation, urbanisation and networking. They represent a mass of interconnected economic activities, typically characterised by high productivity due to jointly-generated and mutually-reinforcing agglomeration economies. These regions act as innovators of products, processes and techniques. They drive regional and national economic growth. As gateways to national and international economies, they are exposed to powerful forces of globalization, including transportation, communication and information technologies. Metropolitan city regions around the globe engage in economic activities that are increasingly structured on national and international planes. Population densities in these regions are high.''
Agglomeration economies mean?

• A. National economies
• B. a differentiation of different economies
• C. the agricultural economy
• D. a lot of different economies gathered together

Hint:

When defining a term from a passage, focus on the context and examples provided to understand its meaning, then choose the option that best reflects the described concept.

Answer 1

The Correct Option is D

Step 1: Understand the term "agglomeration economies" from the passage. The passage describes agglomeration economies as differing across habitations, with examples like scale economies (market towns), localisation economies (medium-sized cities), urbanisation economies (larger cities), and a combination of these in metropolitan regions.
Step 2: Analyze the characteristics. It highlights that metropolitan regions have "jointly-generated and mutually-reinforcing agglomeration economies," indicating a clustering of various economic activities (localisation, urbanisation, networking) that work together to boost productivity and innovation.
Step 3: Match with the options. Option A (national economies) is too broad, option B (a differentiation of different economies) focuses on differences rather than clustering, and option C (the agricultural economy) is too narrow. Option D (a lot of different economies gathered together) best captures the idea of diverse economic activities clustering and reinforcing each other, as described in the passage. Thus, the correct answer is D.