Economic Geography
Natural Resources
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Natural resources are materials in the natural
environment that people value and use to satisfy their needs.
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Renewable resources are natural resources that are
constantly being replaced or regenerated by the environment.
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Soil and fresh water are constantly being
replenished by natural processes.
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Nonrenewable resources are resources that cannot be
replaced once they have been used.
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Nonrenewable resources are minerals that formed
within the earth’s crust over millions of years.
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Coal, oil, and natural gas are nonrenewable fossil
fuels that formed from the remains of ancient plants and animals.
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Recycling and reduction of consumption are ways of
stretching limited supplies of nonrenewable resources.
§ Renewable
resources examples would be soil, water, and forests
§ Nonrenewable
resources examples--fossil fuels (oil, coal, natural gas), and metals (gold,
iron, copper, and bauxite)
Human Resources
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Human resources are man and
his mind
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Human resources depend on
level of education, whether it is skilled or unskilled labor, and are
entrepreneurial or managerial abilities needed.
Capital Resources
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Capital resources are
resources that can be used to make more, like money or tools
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key features of capital are
the availability of money for lending, the level of infrastructure, the
availability and use of tools, machines, and technologies
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Energy Sources
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Modern
industrial countries use energy to light cities, power vehicles, and run
machines.
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Fossil fuels are the most important and heavily used source of
energy, but oil and natural gas reserves are spread unevenly across the world
and will not last forever.
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Nuclear energy is produced by fission, the splitting of uranium
atoms in a nuclear reactor to release their stored energy, but many concerns
surround the use of nuclear power.
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Water power uses the energy of falling water to generate
electricity.
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Geothermal energy uses the energy that comes from the earth’s
internal heat to produce steam to heat homes or make electricity.
•
Solar
energy is energy produced by the sun that is stored to heat water and homes and
to generate electricityThree levels of economic
activity
What are four different categories of economic
activities?
Why are global trade patterns changing today?
What kinds of data indicate a country’s level of
development?
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Primary
economic activities are those that rely directly upon natural
resources, of which hunting, gathering, herding, forestry, farming, and mining
are examples.
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Subsistence
farming is the practice of only growing enough to feed
one’s family or village, and commercial farming is the practice of raising
crops and livestock to sell on the market.
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Secondary
economic activities are those in which raw materials are used to
manufacture products of greater value.
•
A
cottage industry is a small-scale industry practiced in subsistence
economies, while commercial industry turns out large quantities of manufactured
goods.
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Tertiary
economic activities are service industries, which involve firefighters,
lawyers, and salespersons.
•
Quaternary
economic activities are jobs that focus on the acquisition, processing,
and sharing of information, such as education and government.
Nations set up trade networks when they do
not have all the resources and goods they want.
Goods that are sent out of a country are called exports,
and goods that are brought into a country are imports.
Governments seek a favorable balance of imports and
exports because too many imports can be damaging to a nation’s economy by
increasing unemployment and the nation’s debt.
Trade
routes are determined by
geography, transportation technology, and international relations.
Modern technology is changing the nature of global
trade, as computer and satellite networks allow business deals and payment transactions to be conducted electronically.
Economic
activities and trade
patterns affect a country’s level of development.
Modern industrial societies are considered to be
developed, countries with lower levels of prosperity are considered to be
underdeveloped, and nations showing evidence of progress are called developing
countries.
The wealth of countries can be compared by looking
at the per capita gross domestic product (GDP).
Developed countries enjoy a higher standard of
living compared to developing and undeveloped countries.
Developed countries have higher levels of education
and health care, and they have more transportation and communication facilities
per person.
People in developed countries consume more food and
live longer than people in poorer countries.
Energy resources and technology as it has changed over
time:
Wood—deforestation
Coal--pollution, mining
problems, competition with oil and gas
Petroleum--transportation,
environmental considerations
Nuclear--contamination, waste
Solar or wind--cost,
aesthetics
Patterns of land use
Most
economic activities are relatively close to the natural resources they use;
ex.-coal/steel, grain/cattle,
fishing/ocean, hydroelectric power/aluminum smelting.
Not
all nations are close to the resources they use: ex.--Japan has limited natural
resources, but they are a major industrial power and the United Arab Emirates
(UAE) have lots of oil, but no major industries.
Examples of technology creating demand
Some
new technologies have created a demand for a particular natural resource--steam
engine and coal, internal combustion engine and gas, computer chips and skilled
labor.
Costs and benefits from using natural resources
Costs
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1.
Resource depletion.
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2.
Environmental destruction
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3.
Health problems
Benefits
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1. Helps us produce goods and services.
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2. It creates employment opportunities
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3. It helps develop new technologies
The effects of unequal distribution of resources
Because
resources are distributed unequally around the world, it causes several things
to happen:
1. Interdependence
of nations -- they must trade with each other to acquire the goods they do
not possess.
2. Uneven economic
development (rich and poor countries).
3. Energy
producers and consumers.
4. Imperialism
(one country dominating another).
5. Conflicts over control of resources.
Developed
nations are generally urban. Most people in developed nations work in secondary
and tertiary areas. Most developed nations have a high GDP. Most developed nations have a highly
educated population.
Indicators of standard of living and quality of life
A
nation has a high standard of living and a high quality of life if…
§ the
population growth rate is low
§ the
population age distribution is even
§ The
literacy rate, life expectancy rate and percentage of urban people is high
§ the
infant mortality is low
Why do countries trade?
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To import goods and services
they need
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to export goods and services
they can sell for profit
What influences economic activity?
1. A
country’s access to human, natural and capital resources.
Do they have a skilled workforce?
Do they have natural resources?
Are their transportation and communication
networks modern, outdated or nonexistent?
Do they have access to new technology?
2. A
country’s location and ability to exchange goods.
Are they landlocked?
Are they an island or coastal nation?
How close are they to shipping lanes?
What is their access to communications?
Are they members of a political or economic
alliance that provides access to markets? (Examples would be, the European
Union (EU), North American Free Trade Agreement(NAFTA))
What is comparative advantage?
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Comparative advantage
means a country will export goods and services that they can produce at lower
relative costs than other countries.
What are the effects of comparative advantage?
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Enables nations to produce
goods and services they can sell for profit
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influences the development
of industries (ex. steel, aircraft, automobile, clothing)
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supports specialization and
efficient use of human resources
Examples of countries and their use of resources
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Japan--highly industrialized
despite limited natural resources
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Russia--has numerous
resources but many are not economically profitable to actually develop
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United States--diversified
economy , specialized industry, abundant resources
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Cote d’Ivorie--limited
natural resources, but they use cash crops to buy manufactured goods
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Switzerland--has limited
natural resources, but produces goods on a global scale
What are the effects of unequal distribution of
resources?
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Unequal distribution of
resources causes countries to specialize in the goods and services they
produce. It also encourages countries to
trade with one another for the goods they can not produce themselves. It allows only some to make a profit.
How has economic interaction changed over time?
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Labor has moved from
individual homes (cottage industry) to factories to offices to
telecommunications.
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There has been a large
migration from rural to urban areas.
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Industrialized countries now
export labor intensive work to developing nations.
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Trade alliances have grown
in number.
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Service industries
(tertiary) have grown in number.
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Financial service networks
and international banks have increased.
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Products have become
internationally assembled instead of everything being made in one location (ex.
vehicles, electronics).
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Modern transportation
networks that allow for rapid and efficient exchange of goods and services
(ex. Federal Express, UPS, US Postal
Service) have grown.
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Widespread marketing of
products has increased (ex. Fuji, Nike, etc).
Examples
of Economic Unions
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EU--European
Union
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NAFTA--North
American Free Trade Agreement
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OPEC--Organization
of Petroleum Exporting Countries
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ASEAN--Association
of Southeast Asian Nations
Advantages
of Economic Unions
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They allow for more
efficient industries
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They have access to larger
markets
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They have access to more
human, natural, and capital resources without restrictions
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They have a greater
influence on world markets
Disadvantages
of economic Unions
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They cause some industries
to close
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Certain industries become
concentrated in particular countries while forgetting the smaller ones.
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Agribusiness is replacing
the family farm.
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There is often difficulty in
agreeing on common economic policies.
