I think that there should be no effect until a unit dies, and then the city pop takes a small hit, as well as a small hit in happiness for x# of turns. As for pop loss w/ population heads, how about:
Every unit has a specific # of "bushels"; or each unit could have the same number for simplicity's sake. When a unit dies, the city it's from suffers the loss of that number of "bushels" in its growth box, representing pop loss. If that number drops the city below zero in the box, it loses a pop point. Additionally, the bushel loss causes some unhappiness.
Damaged units could cause a smaller loss of "bushels".
Every unit has a specific # of "bushels"; or each unit could have the same number for simplicity's sake. When a unit dies, the city it's from suffers the loss of that number of "bushels" in its growth box, representing pop loss. If that number drops the city below zero in the box, it loses a pop point. Additionally, the bushel loss causes some unhappiness.
Damaged units could cause a smaller loss of "bushels".
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