Economic Geography

1. Economic Geography

2. Economic Activities • Economic geography deals with how people earn a living and use resources and with the links among economic activities. • Economic geographers group money-making activities into four categories: primary, secondary, tertiary, and quaternary activities. • Primary: use natural resources directly • Secondary: use raw materials to produce or manufacture something new • Tertiary: provide services to people and businesses • Quaternary: process and distribute information

3. Economic Systems • There are three main types of Economic Systems: traditional, market, and command. • In a traditional economy, people make good for themselves and their families. There is little surplus or exchange for goods. There are few markets. Traditional economics are found mostly in the world’s poor countries and rural areas.

4. In a market economy, people freely choose what to buy and sell. Market economies are guided by the system of free enterprise. • This system allow competition among businesses determine the price of products. • The businesses’ need to make profits drives their decisions. • Businesses supply products and set prices to meet demand. • Free enterprise is the basis of capitalism. • In a capitalistic system, businesses, industries, and resources are privately owned. • Most of the world’s rich countries have market economies.

5. In a command economy, the government decides what to produce, where to make it, and what price to charge. • Prices are not based on the market forces of supply and demand. • For example, a loaf of bread may cost $1 to produce but the government may set the price at $0.25 so that people can easily afford it. • Communist countries have command economies. • Communism is an economic and political system in which the government owns or controls almost all the means of production. • Cuba and North Korea are communist countries.

6. Economic Patterns, Resources, and Technology • The creation and distribution of resources affect the location of economic activities. • Resources also affect the movement of products, capital, and people. • The need for a resource draws businesses and workers to the place where it is found. • Related businesses grow nearby. • Businesses must then find ways to ship their products to markets. • Changes in technology, transportation, and communication also affect the location and patterns of economic activities.

7. Level of Development Development refers to steady improvement in a country’s economy and people’s quality of life. Economic progress varies greatly among different countries and also within countries.

8. Measures of Development • Gross National Product (GNP) • The total value of goods and services that a country produces in a year. • It includes good and services made by businesses owned by that country’s citizens but located in foreign lands. • Gross Domestic Product (GDP) • Includes only those goods and services created within the country. • It become more useful when it is divided by the number of people living in a country. This gives the per capita GDP, which can be used to compare income levels in different countries.

9. Industrialization • The process by which manufacturing based on machine power becomes widespread in an area. • Many people work in manufacturing, service, and information industries. • Other measures of development include • Average amount of energy people use. • Size and quality of a country’s transportation and communications systems.

10. Standard of Living A measurement of factors such as the amount of personal income, levels of education, literacy rate, quality and availability of health care, technology level, life expectancy, and food consumption. The greater the values for each factor, the better the standard of living.

11. Developed and Developing Countries • Developed countries are the riches countries. • They have high levels of industrialization, and their people enjoy high standards of living. • The world’s developed countries include most countries in Europe, the United States, Canada, Japan, Australia, and other. • Less than 25 percent of the world’s people live in developed countries. • They all have high per capita GDP, high levels of education, and good health care. Literacy rates are high. Life expectancy is also high. Both birthrates and death rates are usually low resulting in low population growth. • Most people live in cities and work in service or manufacturing industries. Few work in agriculture. • They have good infrastructure: road systems, ports, water delivery, and electric grids.

12. Developing countries are the world’s poorer countries. • These countries are less productive economically and have lower standards of living. • These group includes most of the countries of Africa, Asia, Central and South America, and the Pacific Islands. • Most of the world’s people live in developing countries. • Most have a low per capita GDP. • In general, birthrates are high and life expectancy is low. • Grade schools are often available but few people go to high school or college.

13. Middle-income Countries • Found between developing and developed countries economically. They have features of both. • Many of these countries have new industries and many people are switching from rural life to city life. • Their cities may be modern, but rural areas and small towns are often poor. • Countries included in this group are Mexico, Brazil, Thailand, Argentina, South Africa, and Malaysia.