86 terms

Unit 9 economy AP Human Geography


Terms in this set (...)

-a system of production, distribution and consumption in a region
Economic sectors
-the economy can be broken down into different sectors or activities
-sectors basically organize an economy by types of jobs
-the level of a countries development is directly related to these sectors
-stage of production sectors
Primary production
-extracting natural resources from the earth
-jobs that "gather" natural resources
-ex: agriculture, mining, fishing, forestry, oil drilling
-______ _______is the largest sector in LDC's and the smallest in sector in MDC's
-only 3% of jobs in the US are primary sector jobs
-includes subsistence farmers and commercial farming
-it is the least valuable of sectors
-but majority of worlds population lives in rural agricultural regions
-mining and energy extraction
-global prices can fluctuate wildly
-economies that rely heavily on energy prices (like oil) can rise and crash quickly with global prices
-economies that rely heavily on one commodity can drastically change with the commodity chain
Secondary production
-converting natural resources into products
-typical job=factory worker
-largest sector in NIC's (newly industrializing countries)
-NIC ex: Brazil, China, India, Philippines
Value added processing (part of secondary)
-value added to natural resources in the manufacturing process
-factory-made products far out-value agricultural and natural resource products
-the more complex and technology driven the manufacturing the higher the value of the end product
Durable goods
-intended to be used for more than a year
Non durable goods
-intended to be used for less than a year -food, shampoo
Commercial industry
-large scale, factory based and employ many workers. Each worker typically participates in one small step of the manufacturing process, rather than making an entire product from start to finish. The purpose of a commercial industry is widespread production-to sell as many products as possible
Cottage industry
-small scale, people work in their own homes making products to sell, may only have one or two employees. In cottage industries a worker often makes a projects from start to finish
Tertiary production
-service jobs
-not gathering resources, not making products
-examples- lawyer, truck driver, doctor
-largest sector in MDC's
-80% of US jobs are in the tertiary sector
-service jobs offer intangible products-you cannot touch them
-low benefit services=labor force is low skilled low pay
-high benefit services=labor force is highly skilled, high pay
Quaternary production
-knowledge based or information based jobs
-tend to be highly specialized/highly skilled jobs
-ex: nuclear engineer, computer programmer, CEO
-economic system in which individual corporations and states produce goods and services that are exchanged for a profit
-to create profit produces seek the cheapest production and costs possible
-wealth in the form of money or other assets
Wallersteins world systems theory
-great economic inequality between countries. Inequalities are result of colonization. Wealthy countries continue to exploit poorer countries for economic gains
-core countries exploit the periphery-using them for cheap labor, cheap raw materials and large scale agricultural plantations
Three tenets of world systems theory
1) the world economy has one market and global division of labor
2) the world has multiple states, but everything takes place within the context pf the world economy
3) the world economy has three tier structure
-a tier is a site where particular economic processes take place
Tier one core
-______ countries have higher levels of education, high salaries and more technology
-________ processes generate more wealth
-________ countries have high levels of tertiary and quaternary sector jobs
Tier two semiperiphery
-countries where core and periphery processes are taking place
-______ countries have high levels of secondary sector jobs
Tier three periphery
-______ countries have lower levels of education , lower salaries and less technology
-________ countries are dominated by primary production jobs
-the growth of manufacturing activity in an economy or a region
Industrial revolution
-a series of inventions that brought new uses to known energy sources, new machines to improve efficiencies and enable other new inventions
-ex: steam engine, Iron smelting, Water pumps
Beginning of industrial revolution
-began in Great Britain in the mid to late 1700s
-why Great Britain?
1. flow of capital (capital=wealth/money)
2. second agricultural revolution
3. Mercantilism and cottage industries
4. resources-coal, iron ore and water power
Diffusion (of industrial revolution) to mainland Europe
-in early 1800s, innovations diffused into mainland Europe
location criteria
1. proximity to coal fields
2. connectivity via water to a port
3. flow of capital
Later diffusion (of industrial revolution)
-in late 1800s, innovations diffused to some regions without coal
location criteria
1. access to a railroad
2. flow of capital
-dominant mode of mass production during the twentieth century, production of consumer goods at a single site
-assembly line model-different groups performing different tasks to complete a product
Vertical integration
-when the same company owns and operates multiple sectors of the commodity chain
Commodity chain
-explains the links between producers and consumers
-commodity=a good that is marketed and sold
-it is the entire step by step process getting from the producer to the consumer
Post fordist
-current mode of production with a more flexible set of production practices in which goods are NOT mass produced

Flexible production system- production is accelerated and dispersed around the globe by multinational companies that shift production, outsourcing it around the world
-move their production to different factories `
Just in time delivery
-rather than keeping a large inventory of components or products, companies keep just what they need for short term production and new parts are shipped quickly when needed
-this was created as many motor companies would produce a great amount of cars hoping they would sell all of them but then ending up having lots upon lots of new cars that weren't being sold (during the great depression)
Intermodal connections
-places where two or more modes of transportation meet-air, road, barge and ship
Break of bulk point
-location along a transportation route where goods must be transferred from one mode of transportation to another
-port of Portland-ships unloaded Toyotas on to rail cars or semi trucks
-we can classify sources by their _______
-non living resources= non renewable (ex: fossil fuels and minerals)
-living sources=renewable (ex: fishing and forestry)
-alternative energy sources= solar, wind, nuclear
-tend to be more expensive to harness
-our ability to replace renewable resources as fast as we harvest them
-planting a tree as we cut one down
Location theory
-theories predicting where business will or should be located
Weber's least cost theory
-manufacturing plants will locate where costs are the least
-minimize costs
-location of raw materials
-location of the market
-transportation costs (not really mattering in today's world as transportation is very cheap)
-location chosen always has least combined costs
-a location may have higher transport costs, but more inexpensive labor
Weight losing/Bulk reducing
-final product weighs LESS than raw material
-trees to paper
Weight gaining/Bulk gaining
-final product weighs MORE than main raw material
-bread, cars
Friction of distance
-the increase in time and cost that usually comes with increasing distance
-ex: the farther your manufacturing plant is from your natural resource the higher your transportation costs
-occurs when industries clump together in the same area, can share costs such as electrical lines, roads, pollution control, etc.
High-technology corridors
-an area designated by local or state GOVERNMENT to benefit from lower taxes and high-technology infrastructure with the goal of producing high=technology jobs to the local population
-silicon valley, California
-an area PLANNED for high technology where agglomeration built on a synergy among technological companies occur
-ex: route 128 corridor in Boston
-a bunch of high technology companies group together making a area of high technology
-occurs when industries "declump" because of the negative effects of industrial over crowding-pollution, traffic, congestion, labor shortages
Service economy
-economic activity associated with the provision of services-such as transportation, banking, retailing, education, and routine office based jobs
Global division of labor
-corporations can draw from labor around the globe for different components of production
Commodification of labor
-factory owners and corporations began looking at human labor as commodities (objects for trade) with price tags per hour, not seen as people
moving individual steps in the production process (of a good or a service) to a supplier, who focuses their production and offers a cost savings
-go to supplyer to get resources/instead of being your own
-out sourced work that is located outside the country
- a process by which companies move industrial jobs to other regions with CHEAPER LABOR, leaving the newly deindustrialized region to switch to a service economy and work through a period of high unemployment
-newly industrialized country
-China, south Africa, India, Brazil, mexico
Asian tigers
-industrial economies of Asia that are rapidly grown
-two types
--Old -recieved foreign aid from international (not loans)
-cause:foreign democracies supported their growth during cold war to battle communism
-manufacturing developed in 1950s-70s
-irony: by 1970s these countries were competeing with us and britain
-Japan, South Korea, Taiwan, Hong Kong, Singapore
-foreign direct investment (loans looking for profit)
cause: demand for low cost consumer products
-China, India, Indonesia, Malaysia, Thailand, Vietnam
Gross domestic product (GDP)
-dollar value of all goods and services produced IN THE COUNTRY in one year
Gross national product (GNP)
-dollar value of goods and services produced by citizens of a country, ON ITS LAND OR IN FOREIGN LAND in one year
goods+ services=_____
Gross national income (GNI)
-dollar value of all goods and services produced in a country, plus value of exports minus imports
Trade surplus
when exports are greater than imports
-a positive number-adds value to the economy
Trade deficit
-when imports are greater than exports
- a negative number-removes value from the economy
Purchasing Power Party (PPP)
-adjusts the value of money and costs of living for each country
-attempts to control for differing monetary values and costs
-for example in country A one hamburger costs 2.00, while in B one hamburger costs 6.00. A worker in country B may make more in wages, but would have significantly less purchasing power and potentially be "poorer" than a worker in country A who makes less money
-PPP creates a country of equal: If everyone in the world brought their income to the country of "Equal" and their money was converted to an equal value, how wealthy would they be?
Problems with measuring economic welfare and development
-indicators do not factor in a countries underground economy of tax evaders and criminal enterprises
-Colombia- billions of dollars in cocaine not factored into economic indicators
-determines a country's growth and standard of living, but it only does this from a material perspective and does not factor in actual social welfare
-India-huge increase in GDP
-very low HDI (135/177)
-shows overall wealth, but not distribution. A small percentage of the population may be reaping most of the wealth
Human development Index (HDI)
-designed by the United Nations-scale of 0.00 to 1.00
-includes social indicators as well as economic
-GDP per capita
-Adult literacy rate
-Average level of education
-Total life expectancy
Gender related development index
-compares the level of development of women with that of males in the same country using HDI measures
-measures three basic dimensions
-Health-measured by life expectancy at birth
-Education-measured by expected years of schooling and mean years of schooling
-Economic attainment-measured by estimated earned income
-Arab states and the Sub-Saharan African region have relatively high gender gaps. Afghanistan highest largest gap
-In 16 countries female HDI values are equal or greater than males (Argentina, Russia, Poland) often due to significantly longer life expediencies for women
GEM (gender development measure)
-compares the ability of women and men to participate in economic and political decision making
Stage one (of economic development)
-pre industrial
-independent local centers
-small market areas
-little interaction
-mostly agricultural
Stage two (of economic development)
-early industrialization
-concentration of wealth and power into a single core region or city
-raw materials drawn from periphery to processes in the core
-core sends processed material to periphery
Stage three (of economic development)
-industry develops further
-core strengthens and remains dominant but...
-regional sub centers emerge
-core and sub centers continue to process raw materials from the periphery
Stage four (of economic development)
-mature and functionally interconnected economy
-periphery is absorbed into nearby economies
-most MDCs in stage four
-North America, western Europe
Rostows stages of growth
-developed in the 1950s
-assumptions: every country has some form of coparative advantage that can be used for economic growth
-5 stages
1. traditional society
2. preconditions for take off
3. take off
4. drive to maturity
5. age of mass consumption
Rostow stage one traditional society
-main economic activity is subsistence farming
-very little investment in infrastructure
Rostow stage two preconditions for takeoff
-country's leadership begins to invest in infrastructure-roads, ports, utilities, schools
-infrastructure supports economic development and trade with other countries
Rostow stage three takeoff
-economy focuses on a limited number of individual exports
-many people still in agriculture, but shifting to industrialization
-increase in technical knowledge
Rostow stage four drive to maturity
-technology diffuses throughout country
-advances in industrial production are seen in most sectors
-workers become skilled, educated
-fewer workers in agriculture
Rostow stage five age of mass consumption
-consumer products dominate the economy
-technical knowledge, education=high
-agriculture is mechanized (no longer traditional)
-very small agricultural labor force
Criticism of Rostows theory
-his model is based on US and other industrialized countries
-assumed comparative advantage not equa
-example: natural resources extracted from LDCs by MDCs during colonization-that income is lost forever
-wealth in many less developed nations is controlled by foreign corporations, wealth is not used to develop local economy or improve social welfare, cannot benefit from your "comparative advantage" if you don't control the advantage
-the continued economic dependence of new states on their former colonial masters
Dependency theory
-asserts that former colonies are still poor because of colonization
-political boundaries drawn for resources not according to cultural grouping
-when colonizers left, the populations in those states were not unified and has led to ethnonational conflicts
-the process of improving the material condition of people through the growth and diffusion of technology and knowledge
-abandoning the local currency of a country and adopting the dollar as the local currency
-hope to gain from use of a stronger more stable currency-Ex: the US dollar
Export processing zones (EPZ's)
-zones established by many periphery and semiperiphery countries to attract foreign investment
-offer favorable tax rates, regulations and other incentives
-all product is exported
Special Economic zones (SEZ's)
-specific area within a country which tax incentives and less stringent environmental regulations are in place to encourage foreign investment
North America Free Trade Agreement
-agreement between Canada, United States and Mexico which eliminated trade barriers and facilitated the cross border movement of goods and services
-tax on good being imported so cost is equivalent to that of in US
Islands of development
-places within a region or country where foreign investment, jobs and infrastructure are CONCENTRATED
Nongovernmental organizations (NGO)
-organizations that operate independent of state and local governments typically _____ are non profit organizations
-Each _____ has its own focus/ set of goals
-generally focus on economic development that will also improve human welfare
-building schools
-providing malaria nets
-providing safe water
Microcredit program
-loans given to poor people, particularly women, to encourage to encourage development of small business
-when a family sends a child or adult to a labor recruiter in hopes that the recruiter will send money back to the family. Also hope family member will earn money and send it back
Foreign debt obligations
-countries take loans to develop and then must pay back loan with interest
-if loan payments exceed the export of goods and services the country will suffer severe economic conditions
Vectored diseases
-diseases that are carried from one host to another by an intermediate host
-parasite spread by mosquito's
-kills 150,000 children in the global periphery each month
Formal economy
the legal economy that governments tax and monitor
Informal economy
the illegal or uncounted economy that governments do not tax or keep track of