Use the following information in answering questions 2-4. The nation of Erehwon has three industries: manufacturing, agriculture and services. Each national industry has 50 million workers. Centralia is a small (one county) metropolitan area in Erehwon. Centralia has total employment of 150,000 workers. Centralia’s employment is divided 75,000 in manufacturing, zero in agriculture and 75,000 in services. The Centralia County government wants to do an impact study of a proposed expansion of the XYZ Manufacturing Company in Centralia. Currently the plant has 200 workers and the expansion would increase its employment by 150 workers to 350 workers. All of the new output will be shipped to new markets outside Centralia. The Centralia County government contracts with Regional Consulting, Inc. (RCI) to do an impact study.
2. The Lead Group at Regional Consulting, Inc. (RCI) suggests using the location quotient technique to estimate a multiplier for Centralia.
a. What location quotients (LQs) will the Lead Group get for Centralia’s three industries?
b. What will the Lead Group estimate for Centralia’s basic employment in each of its three services? (Be quantitative.)
c. What will be the Lead Group’s estimate of the size of the entire basic sector (B) in Centralia?
d. What is the Lead Group’s estimate of Centralia’s non-basic sector, (N)? How many non-basic workers are in Centralia’s manufacturing sector? Agricultural sector? Services sector? (Be quantitative.)
e. Given the Lead Group’s estimate of Centalia’s basic employment (B), what value do they get for Centralia’s employment multiplier (T/B)? (Be quantitative.)
f. What impact does the Lead Group estimate for the expansion of XYZ Manufacturing, i.e. once the metro-area has full adjusted what does the Lead Group expect to happen to Centralia’s total employment (T), basic employment (B) and non-basic employment (N)?
