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Economic Development

Terms in this set (30)

Economics 101
A social science that studies how individuals, governments, firms and nations make choices on allocating scare resources to satisfy their unlimited wants and needs.
Three Basic Economic Questions:
What will be produced with the limited resources?
How will the goods and services be produced?
For whom will the goods and services be produced?
Four Factors of Production:
Land, Labor, Capital, and Entrepreneurs
Land
a broad measure representing all basic natural resources that contribute to production.
-Renewable (trees, solar, wind) vs. Nonrenewable (oil and coal)
Labor
the human factor of production
Capital
previously produced goods used to produce other goods.
-Financial Capital=Investment Capital=Money used to start a business
Entrepreneurs
the managerial ability and risk taking that contributes so much to a productive economy. People who organize land, labor, and capital to start a business. Risk takers. who search for profit.
Industry as a System:
Inputs, Processes, Output
Inputs
these can include raw materials, energy, transport, labor and money (capital investment)
Processes
assembly, maintenance, packaging, & transport
Output
finished products, profits, waste
Sectors of the Economy
Primary Sector, Secondary Sector, Tertiary Sector, & Quaternary Sector
Primary Sector
economic activities that involve the extraction of economically valuable products from earth, including agriculture, ranching, hunting & gathering, fishing, mining & quarrying...
Secondary Sector
activities that take a primary product & change it into something else such as finished products. Manufacturing and assembly are the principal secondary economic activities.
Tertiary Sector
industries that provide service or skills... education, healthcare, retail, office work, transport, entertainment, law...
Quaternary Sector
information technology, research development, developing new products and innovations.
MEDC
richer country where the tertiary/ quaternary sectors most common.
LEDC
poorer country where the primary sector most important of the economy.
NIC
newly industrializing, developing quickly & secondary sector the most important.
BRIC
Brazil, Russia, India, & China are developing quickly, referred to as embedding markets.
As countries _______ the importance of different sectors of the economy tend to change.
develop
The countries of the world can be divided into two major world regions:
the "core" and the "periphery"
Core
includes major world powers and the countries that contain much of the wealth of the planet.
The "core" consists of most of :
Western Europe, the United States, & Japan
Periphery
includes those countries that are no reaping the benefits of global wealth and globalization.
The "periphery" consists of:
Africa, South America, and Asia (excluding Japan & South Korea)
Subsistence Farming
when people only own small areas of land and grow food for themselves and their family. There is normally no surplus to make any money.
Industrialization
the process of the factories opening & secondary sector becoming more important.
Deindustrialization
the process of factories closing and industry declining in a country. This normally happens because the cost of labor increase & it becomes cheaper to manufacturer overseas in LEDCs and NICs.
Mechanization
the process of manpower being replaced with machine power. As countries develop machines tend to become more important.
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