Think About What is economics? What is economics? What questions to economic geographers ask? What questions to economic geographers ask?

Economics The study of how scarce resources are allocated in the face of unlimited wants The study of how scarce resources are allocated in the face of unlimited wants Economic activity Economic activity –Production –Consumption –Development & Growth

Economic Geography An Introduction

Economic Geography The study of how economic activity is distributed across space The study of how economic activity is distributed across space Questions: Questions: –Where do industries locate and why? –Why some places are relatively wealthy and others relatively poor? –How does economic globalization affect the world and our communities?

Economic Activity Classification based on level of removal from “natural state” Classification based on level of removal from “natural state” Primary Primary –Extraction –Gathering –Resources –Agriculture

Economic Activity Secondary Secondary –Value added to resource –Manufacturing –Processing –Construction –Utilities

Economic Activity Tertiary Tertiary –Sale and distribution of finished goods –Retail and Wholesale Trade –Personal and Professional Services Quaternary Quaternary –Information, research, management

Critical Thinking? Can you think of any generalizations we can make about location for each level of activity? Can you think of any generalizations we can make about location for each level of activity? –Primary –Secondary –Tertiary –Quaternary

Economic Base Theory Economic geographers often analyze the economy of a place by looking at the activity from which it draws its wealth Economic geographers often analyze the economy of a place by looking at the activity from which it draws its wealth Economic base theory divides all activity into two options Economic base theory divides all activity into two options –Basic activity –Non-basic activity

Basic Activity Economic activity that results in goods and services that are sold outside the region Economic activity that results in goods and services that are sold outside the region Thus, money is brought into the region Thus, money is brought into the region Employment in these sectors is called basic employment Employment in these sectors is called basic employment

Basic Activity Basic activity is also known as export activity Basic activity is also known as export activity Generally includes industries such as Generally includes industries such as –Agriculture –Mining –Manufacturing

Non-basic Activity Non-basic activity is that which is both produced and consumed locally Non-basic activity is that which is both produced and consumed locally Thus, no new wealth is created Thus, no new wealth is created Non-basic sectors include Non-basic sectors include –Retail trade –Personal services

Critical Thinking Into which category would you put the following economic activity? Into which category would you put the following economic activity? Tourism Tourism Education Education Financial Services Financial Services

Multiplier Effect Way of expressing the relationship between basic and non-basic employment Way of expressing the relationship between basic and non-basic employment For every job created in the basic sector, a number of new jobs is created in the non- basic sector For every job created in the basic sector, a number of new jobs is created in the non- basic sector –So, 2,000 manufacturing jobs, might result in a total of 10,000 new jobs in a community