Economic Geography

Mrs. BraheGlobal Studies

Objectives

At the end of this lesson, you will be able to:

Identify the four basic types of economic activity

Define the four levels of economic activity Distinguish among renewable, non-renewable,

and inexhaustible resources Identify key components of economy support

systems Distinguish between GNP and GDP and between

developing and developed nations

What is an Economy?What is an Economy?

An economy consists of the production and exchange of goods and services among a group of people

Can be local, regional, national or international

Economic SystemsEconomic Systems

Definition: the way people produce and exchange goods and services

Four types: Traditional – goods and services traded

without using money (“barter”) Command – government controlled production

(they own the means “planned”) Market – production is determined by demand

(“capitalism”) Mixed – combination of command and market

provides so that all will benefit

Economic ActivitiesEconomic Activities People choose how they meet their needs Some people only raise enough food or animals

to meet their need to eat and have little left over to sell to others = subsistence agriculture

Other areas have market-oriented agriculture that produces crops or animals that farmers sell to markets

Market oriented depends on the Law of Supply and Demand: A law which states that when supplies of goods and services become plentiful, prices tend to drop. When supplies become scarcer, prices tend to rise.

Economic ActivitiesEconomic Activities

Industries can be various sizes Small industry - family of craftspersons who produce

goods to be sold locally, take place in home = cottage industries

Large industry – commercial, meets needs in a large area

Levels of Economic Activity Primary: gathering raw material Secondary: adding value to materials by

changing form (manufacturing) Tertiary: providing business or professional

services (salesperson, teacher, or doctor) Quaternary: information, management and research

service by highly-trained people

Natural ResourcesNatural Resources Three types

Renewable: can be replaced naturally (ex: trees, seafood)

Non-renewable: cannot be replaced once removed from the ground (ex: metals like gold, iron or non-metals like gemstones, limestone or even fossil fuels like petroleum and coal)

Inexhaustible energy: unlimited, as a result of solar or planetary processes (ex: sunlight, wind, tides)

Are abundant but not distributed equally around the world

Location, quality and quantity of a country’s natural resources are important to its economy

Economic Support SystemsEconomic Support Systems Producing and Distributing goods

requires helpful support systems! Infrastructure – basic support

systems needed to keep an economy going Includes power, communications,

transportation, water, sanitation and education systems

More sophisticated infrastructure = more developed country

Measuring Economic DevelopmentMeasuring Economic Development

Per capita income: average amount of money earned by each person in a political unit

Gross national product (GNP): total value of all goods and services produced by a country over a year or other specific time (by… not necessarily in)

Gross domestic product (GDP): total value of all goods and services produced within a country in a given period of time

GDP 2005

GDP = Consumption + Government Expenditures + Investment +Exports - Imports

Measuring Economic Development

Levels of development Developing nation

low GDP and limited development on all levels of economic activities

Lack an industrial base, struggle to provide people with items to meet basic needs

Developed nation High per capital income and varied economy

(especially with quaternary activities like computer software development)

Western Europe, Japan, Canada, United States…

And we are done with Human Geography notes!