Economic Geography

Economy Consists of the production and exchange of goods and services among a group of people 2. Operate at local, regional, national, and international level

B. Types of economic systems 1. Traditional economy a. goods and services are traded without exchanging money b. also called a barter economy

2. Communist economic system a. production of goods and services is determined by a central government, which usually owns the means of production b. production does not necessarily reflect consumer demand c. Also called a planned economy d. example: former Soviet Union (Communist Government)

3. Free Enterprise Economy a. production of goods and services is determined by the demand from consumers b. also called market economy c. example: United States

4. Socialist Economy a. combination of Communist and Free Enterprise economies (actually any combination b. example: Europe

Economic Spectrum Mixed Economy Pure Communism, Pure Free Enterprise Sometimes called: Planned Economy or Command Economy Sometimes called: Free Market, Market Economy, or Capitalism

Economic Spectrum Mixed Economy Pure Communism, Pure Free Enterprise Singapore Cuba & North Korea France & Sweden United Kingdom United States Germany

The world’s population today is approximately 6 billion!

C. Levels of economic activity 1. Every business operates at one of four economic levels a. these levels describe how material is gathered and processed into goods and services, and how they are delivered to customers

2. The four levels of economic activity a. primary activities (1) involve gathering raw materials (2) example: gathering timber

MINING

Strip Mining

Farming

Lumber

b. secondary activities involve adding value to materials by changing their form **MAKING A PRODUCT!** 2 example: manufacturing automobiles

Primary – Milking the Cow Secondary - Making the cheese

Lumber Industry Primary Activity Furniture Industry Secondary Activity

Mining Industry (metals) - Primary Activity Automobile Industry - Secondary Activity

C. Tertiary Activities Involve providing business or professional services. Example: salespeople, teachers, or doctors

d. quaternary activities 1. provide information, management, and research services by highly trained persons 2. example: scientists

D. Natural resources 1. Materials on or in the earth – such as trees, fish, or coal – that have economic value 2. They only become resources when society has the technology and ability to transform them into goods

3. Three basic types of natural resources a. renewable (1) can be replaced through natural process (2) examples: trees and seafood

Renewable Resources include; *Wind *Sun (solar) *Water (hydro) *Geothermal *Timber

b. non-renewable (1) cannot be replaced once they have been removed from the ground (2) examples: gold, silver, petroleum, natural gas, coal

c. inexhaustible energy sources (1) unlimited quantity (2) used for producing power (3) include sunlight, winds, tides

E. Infrastructure 1. Consists of the basic support systems needed to keep an economy going 2. Includes power, communications, transportation, water, sanitation, and education systems

Infrastructure

Infrastructure Sewer system

F. Measuring economic development Per capita income 3. The more sophisticated the infrastructure, the more developed the country F. Measuring economic development Per capita income Average amount of money earned by each person in a political unit such as a country -U.S. - $46,900* - Japan - $34,000* - China - $3,000* - Haiti - $1,300* * 2008 estimate

Per Capita Income

Gross national product (GNP) a. total value of all goods and services produced by a country over a year b. reflects value of goods or services produced in one country by a company based in another country

*U.S. - $14.26 trillion (world’s largest economy) (that’s $14,260,000,000,000) *China - $7.97 trillion (2nd largest) *Japan - $4.92 trillion (3rd largest)

3. Gross domestic product (GDP) a. total value of all goods and services produced within a country over a year

GDP - Gross Domestic Product in trillions

G. Development levels 1. Developing nations (less developed) a. nations that have a low GDP and limited development on all levels of economic activity

2. Developed nations (More Developed) a. countries with a high per capita income and varied economy b. economy has quaternary activities such as computer software development

C. Development Levels 1. More developed Countries – have a higher per capita income and higher standard of living 2. Less developed Countries – have a lower per capita income and lower standard of living

3. Newly industrialized Countries – are in between More Developed and Less Developed Countries in per capita income and higher standard of living

3. Standard of Living – The quality of life in a country. More Developed Countries Less Developed Low Infant Mortality Rate High (bad) Infant Mortality Rate High Life Expectancy Low Life Expectancy High Literacy Rate Low Literacy Rate Industrial or Service Sector Jobs Mostly Agricultural Jobs

Standard of Living - Example More Developed United States Less Developed Haiti Per Capita Income $46,900 $1,300 Infant Mortality Rate (per 1,000 live births) 6.26 59.69 Life Expectancy 78.11 years 60.78 years Literacy Rate 99% 52.9% Economic Sector Services Agricultural