ECONOMIC GEOGRAPHY

ECONOMICS ANSWERS 3 BASIC QUESTIONS:

• WHAT AND HOW MANY GOODS AND SERVICES WILL BE PRODUCED?

• HOW WILLTHESE PRODUCTS BE PRODUCED?

• HOW WILL WEALTH FROM THE SALE BE DISTRIBUTED?

FOUR TYPES OF ECONOMIC SYSTEMS

TRADITIONAL

COMMAND

DEMAND

MIXED

TRADITIONAL ECONOMY

TRADITIONAL ECONOMIES

RELY ON BARTER,WHERE GOODS AND SERVICES

ARE TRADED WITHOUT

EXCHANGING MONEY

COMMAND ECONOMY

Examples: China, Cuba, North Korea

• Production of goods and services are determined by a central government

• Also called a PLANNED ECONOMY or COMMUNISM

• Consumers have no impact on the price or amount of goods produced

DEMAND ECONOMY

ALSO CALLED A MARKET ECONOMYOR CAPITALISM

PRODUCTION OF GOODS ANDSERVICES ARE DETERMINED BYDEMAND FROM CONSUMERS

EXAMPLE: UNITED STATES

MIXED ECONOMYCOMBINATION OFDEMAND ANDCOMMAND ECONOMIES

GOVERNMENTCONTROLSHEALTH CARE,INSURANCE, TRANSPORTATIONAND OTHER SERVICESFOR THE PUBLIC GOOD EXAMPLES: SWEDEN, DENMARK,

NORWAY

LEVELS OF ECONOMY ACTIVITIES

PRIMARY

SECONDARY

TERTIARY

QUATERNARY

PRIMARY ACTIVITIESTAKE A RAW

NATURAL RESOURCE

BUT DO NOT CHANGE THE FORM

OF THAT RESOURCE

EXAMPLES; FISHING, FARMING, LOGGING,

MINING

SECONDARY ACTIVITIES

TAKE THE

RAW MATERIALS

AND TURN THEM

INTO FINISHED

PRODUCTS

EXAMPLE: MANUFACTURING

TERTIARY ACTIVITIES

MAKE NO

PRODUCT,

BUT PROVIDE

SERVICES

EXAMPLES: TEACHERS,

DOCTORS, SALESPERSONS,

LAWYERS

QUATERNARY ACTIVITIES

PROVIDE

INFORMATION,

MANAGEMENT,

RESEARCH

SERVICES

EXAMPLES:

TECHNOLOGY,

COMMUNICATIONS

NATURAL RESOURCES• Renewable---Can be replaced

trees, fish

• Inexhaustible---Unlimitedsolar, geothermal, wind, tides

• Non-renewable--Cannot replaced

metals, fossil fuels, gems

MEASURING ECONOMIC DATA

WHAT IS GNP?WHAT IS GDP?

WHAT IS PER CAPITA

GNP?

COMPARING ECONOMIC DATA

• DEVELOPED NATIONS HAVE HIGH GNP AND HIGH DEVELOPMENT OF SECONDARY, TERTIARY, AND QUATERNARY ACTIVITIES

• DEVELOPING NATIONS HAVE LOW GNP AND HIGH LEVELS OF PRIMARY ACTIVITY, LOWER LEVELS OF SECONDARY ACTIVITIES