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Difficulty: MediumLocation and Localization of Industries

Match each industrial scenario on the left with its corresponding location factor or economic outcome on the right.

  • Concentration of traditional leather tanning firms in KanoLocalization of industry due to historical raw material availability and skilled labor pool
  • Siting a cement manufacturing plant near limestone quarries in Ogun StateFirm location driven by proximity to heavy, weight-losing raw materials
  • Establishing a commercial bakery within a densely populated city centerFirm location driven by proximity to the market for perishable or weight-gaining goods
  • Surging land rents and severe traffic congestion in a major industrial estateDiseconomies of localization resulting from over-concentration of firms

Answer

The leather tanning concentration in Kano matches localization of industry; cement plant siting near limestone matches proximity to heavy weight-losing raw materials; urban bakery siting matches proximity to market for perishable goods; and industrial estate congestion matches diseconomies of localization.
Each scenario correctly pairs with its economic principle: clustering of tanning firms in Kano demonstrates industry localization; locating a cement factory near limestone quarries minimizes transport costs for weight-losing inputs; placing a bakery near consumers ensures fresh delivery of perishable items; and congestion/high rent in industrial estates represents diseconomies of localization.

Step-by-Step Solution

1
Analyze each scenario to distinguish between individual firm location factors and industry-wide localization effects.
Identified two firm-level location decisions (cement plant, bakery), one industry clustering phenomenon (tanning in Kano), and one negative external outcome (congestion/rents).
Location of industry refers to where a single firm sets up operations, whereas localization refers to the concentration of many firms in the same region.
2
Match the firm-level location scenarios based on product characteristics and transport cost minimization.
Cement manufacturing near limestone pairs with weight-losing raw material proximity; bakery near population pairs with market proximity for perishable goods.
Weight-losing raw materials pull plant location toward the resource source, while perishable finished goods pull plant location toward consumers.
3
Match the industry-wide clustering scenario and its negative spillover effect.
Kano leather tanning pairs with localization of industry; congestion and high rent pair with diseconomies of localization.
Clustering fosters shared infrastructure and specialized labor (localization), but overcrowding leads to higher costs and inefficiencies (diseconomies of localization).

Key Concept

Location and Localization of Industries
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Topics

Location and Localization of Industries

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