Economic Geography Mrs. Brahe Global 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?  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 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 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 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 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 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 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!