01 A coastal city offers fishing and port employment, yet fewer new families settle there as repeated storms raise insurance and construction costs. Which effect is operating?
Answer and explanation
Correct answer: A. Hazard risk is reducing settlement attraction through higher economic costs
Explanation: A coastal location may provide jobs in fishing and port activities, but settlement decisions also include expected costs and risks. Repeated storms can damage buildings and infrastructure, interrupt work, and raise insurance, repair, construction, and borrowing costs. These extra costs reduce the attractiveness of the city for families and businesses. Some people may still live there, but fewer new households may choose to settle.
Option A is correct because hazard risk is working through economic costs. Storms do not only increase maritime trade, and employment does not make risk irrelevant. Insurance costs are connected to the perceived probability and severity of damage and can influence where people invest or live. Thus the city’s favourable employment opportunities are partly offset by repeated disaster exposure.