Presently an increasing proportion of the rapidly growing world population is attempting to satisfy its economic and social needs and desires in urban context. The enormous migration of people into cities has produced a very distinct possibility of an uncontrollable urban explosion. i) An unprecedented increase in population. ii) Greater demands on the urban infrastructure iii) Higher rates of population growth iv) A decrease in the non-material and in some cases material standards of life. Given this trend, urban economics addresses itself to issues like:- i) How prices influence where people live ii) How prices influence where people work iii) How firms decide where to locate their business in cities and iv) Why we have to plan urban centers Thus urban economics deals with the application of economic theory to such issues facing urban areas of the world.