World Geography Chapter 6 Human Systems World Geography Chapter 6

I. Economic Systems An economic system is a mechanism (social institution) which deals with the production, distribution and consumption of goods and services in a particular society. The economic system is composed of people, institutions and their relationships to resources, such as the convention of property. It addresses the problems of economics, like the allocation and scarcity of resources.

A. Economic Activities Economic Activity: there are four levels of activity Primary: uses natural resources directly (mining, farming, timber, fishing, hunting-gathering) Secondary: producing; manufactures using primary resources (done where labor, energy, and land costs are a positive)

Economic Activities Tertiary: provides a service; usually located near customers Quaternary: processes and distributed information Located anywhere Access to skilled workers, transportation, communication systems Requires specialized knowledge and skills Refers to activities which involve the collection, recoding, arranging, storage, retrieval, exchange, and dissemination of information Ex. Quaternary scientists seek answers to questions concerning past and present interactions among atmospheric, oceanic, and terrestrial systems, physical and biotic, during the time when the record is best preserved.

Economic Systems Answer three questions: What and how many good and services? How goods and services will be produced? How products and wealth will be distributed?

B. Economic Systems Traditional Systems: poor countries, food grown for one family/village only A traditional economy is an economic system in which decisions such as the who, how, what, and for whom questions are all made on the basis of customs, beliefs, religion, habit, etc. It has an advantage over other systems, in that there is little friction among members and is used by African tribes and was used by Native Americans. However, it restricts individual initiative and has a lack of advanced goods, new technology, and economic growth. It is also found today in some parts of South America, Asia, and Africa. There, people still make clothing and shelter almost exactly the same way as they did in the past.

Economic Systems People choose what to buy and sell Market Economy = Profit People choose what to buy and sell Free enterprise – competition among business determines price Free enterprise is the basis of CAPITALISM (business, industry, and resources are privately owned)

Economic Systems Command economy – government decides everything communist countries (China, Vietnam, North Korea, Cuba, Laos) under communism the government controls/owns nearly all aspects of production

Economic Systems Many countries in Europe are socialistic Socialism – The government and private business make the economic decisions Many countries in Europe are socialistic The government owns the major industries HIGH TAXES, wealth is shared called a mixed economy

Economic Systems QUESTION: How would your life change under a different economic system?

C. Economic Patterns, Resources, and Technology resources are needed resources draw people/businesses related businesses grow business must find a way to get products to market Ex. California Gold Rush

CHANGES IN TECHNOLOGY, TRANSPORTATION, COMMUNICATION AFFECT LOCATION AND PATTERNS OF ECONOMIC ACTIVITY

C. Economic Patterns, Resources, and Technology Examples: Refrigerated rail car Communication: Morse code then phone then fax then computers Public transportation Has communication made it better for business?

II. Levels of Development A. Measures of Development Gross National Product – total value of goods and services that a country produces in a year includes goods and services made by businesses owned by that countries citizens but located in other countries Gross Domestic Product – goods and services produced within the country more useful if presented as per person Industrialization—process by which manufacturing based on machine power becomes widespread in an area

Gross Domestic Product (2015)

B. Standard of Living Standard of Living – measured by the amount of personal income, levels if income, nutrition, literacy, health care, technology and life expectancy Literacy – ability to read and write

Standard of living in the U. S Standard of living in the U.S. This graph shows the percentage of the population earning the amount shown on the graph.

C. Developed and Developing Countries Developed – richest, industrialized, high standard of living, high GDP, educated, long life < 25% of the world’s population low birth rate service or manufacturing, good infrastructure (roads, hospitals, ports, transportation, communication global market economy – high energy usage

C. Developed and Developing Countries Developing – less productive, low standard of living, low per capita GDP, $1 per day, high birth rate, little energy usage, mainly farming moving to cities due to the lack of farm jobs Middle Income – between rich and poor Mexico, Brazil, Thailand parts of developing and developed

World Literacy Rates