Chapter 4, Section 5 Economic Geography

Economic Geography 4.5 An economy consists of the production and exchange of goods and services among a group of people The way people choose to produce and exchange goods is called as economic system Traditional Economy - trade without money, or “barter” Command Economy – production determined by government, who also owns the means of production, and does not necessarily reflect the consumer demand: communism Market Economy – Production of goods and services follows consumer demand: capitalism, free enterprise Socialism – where government may own major means of production, but market consumer demand is followed

Economic Activities Subsistence Agriculture – just enough to feed the family Commercial Agriculture – producing a surplus for the market Cottage Industry – on a small scale, often family-owned and operating out of the home Commercial Industry – serving the needs of people in a large area Primary Activities – taking raw materials from the environment: forestry, fisheries, mining Secondary Activities – changing the form of the raw materials: manufacturing, food processing and packing Tertiary Activities - providing business or personal services: education, healthcare, lawyers, retailers Quaternary Activities – providing information, management and research services by highly-trained persons: web services, think-tanks, research universities The more developed the economy, the greater the number and variety of activities

Natural Resources are materials on or near the earth These materials only become resources when society has a use for them: cultural definition of resources Like everything, they are unevenly distributed around the earth Usually divided into three groups Renewable – can be replaced through nature: trees, seafood Non-renewable – cannot be replaced once they are removed from the earth: iron and other ores, fossil fuels (oil, natural gas, coal) Inexhaustible Energy Sources – unlimited in quantity: sunlight, geothermal heat, winds, tides

Developed economies require basic support systems called infrastructure Transportation: roads, railways, ports and airports Communications systems: Strong economies are linked internally and externally by Internet and satellite communications Water, sanitation, electricity and gas networks, and education systems

Geographers compare economies using a variety of statistics Per-capita Income – the average amount of money earned by each person in a political unit Gross National Product(GNP) – the total of goods and services divided by the number of citizens Gross Domestic Product(GDP) – the total of goods and services divided by the number of people within the boundaries

Development Levels Developing Nations – have low GDP, lack an industrial base and struggle to meet their people’s basic needs Developed Nations – have high GDPs, a varied economy, especially with quaternary activities

Mali

India

China

Japan

USA