2. Economy
• Economic systems can vary from nation to
nation and/or from region to region.
• An economy consists of the production
and exchange of goods and services
among a group of people.
• Geographers study economic geography
by looking at the economic actives in a
region.
3. Economic Systems are the way people produce and exchange goods.
There are fourbasic types of economic systems.
• Traditional Economy- Goods
and services are traded.
Money is not
exchanged…
• Command Economy-
Production of goods and
services is decided by a
central government. The
government usually owns
the means of production.
• Market Economy- Production of
goods and services is
decided by the demand
from consumers.
• Mixed Economy- A
combination of command
and market economies. It
is set up to provide goods
and services to benefit all
people.
4. Subsistence Agriculture
• A type of farming in which
most of the produce is
consumed by the farmer
and his family
• People meet their needs in
a variety of ways. Some
groups raise just enough
food or animals to meet
their own needs.
• This is called subsistence
agriculture.
• In other areas people
produce crops or animals to
meet a demand in a larger
market.
6. Cottage Industry
• Small Scale industry
that can be carried on
at home by family
members using their
own equipment
7. Commercial/Manufacturing Industries
• The mass production of
goods, typically driven by
supply and demand
– Commercial industries meet the
needs of people in a very large
area.
• No matter how small or large a
business is, it operates at one of
four economic levels.
8. Service Industry
• Any kind of economic
activity that produces
a service rather than
a product
9. Primary Activities
• Primary Activities involve gathering raw materials, for
immediate use or to use in the making of the final
product.
11. Tertiary Activities
• Tertiary
Activities furnish
personal or
professional
services.
Provides
business or
professional
services, such
as a teacher,
sales person, or
doctor.
13. Natural Resources
• An important part of
economic geography
is knowing which
resources a nation
has.
• Natural resources are
materials on or in the
earth that have
economic value.
14. Natural Resources
• Natural resources are not distributed equally around the world.
• When geographers study a country’s economy, they look closely at
the location of the resources.
• They also look at the quality and quantity of the natural resources.
15. 2
RESOURCES
They also divide natural
resources into three basic
types:
• Renewable-these
resources, such as trees,
can be replaced through
natural processes.
Examples are trees.
• Nonrenewable-these
resources cannot be
replaced once they have
been removed from the
ground—metals and
fossil fuels.
16. Resources
• Inexhaustible energy
sources-these power
producing resources are
the result of solar or Earth
processes. The include
sunlight, geothermal heat,
winds, and tides.
• Recyclable Resources- is
one that can be used over
and over…It must first go
through a process for
reuse. It can be human
driven or naturally
occuring
17. SCARCITY
• The condition of something being scarce or
deficient; an inadequate amount of something.
18. Free Enterprise (Free Market/Capitalism)
• Decisions are determined by individuals and are
based on trade.
• Economic choices are determined through
competition and by supply and demand with profit
as a motive
• Private property is protected by law
• In theory, there is no government interference with
these decisions.
• There is no pure free market economy anywhere in
the world
• Countries with largely free market systems include
Canada, Ireland, Australia, New Zealand, the
United States, ect.
19. Socialist (Mixed Economy)
• Belief that society should democratically distribute
wealth evenly throughout a society. Mixed
Economies generally blend the principles of free
market and command economies
• Individuals are free to make economic choices, but
the government plays a significant role in
determining how wealth is distributed
• Without government involvement in the economy,
private property rights would not be protected, nor
would services requiring vast amounts of capital be
feasible-mass transportation, public education, ect.
• Most of the world’s countries have varying degrees
of a mixed economy
20. Command (Communist/Centrally Planned Economy)
• The central government alone plans and decides how to
answer all three economic questions to further social goals.
• Private property is restricted-the state controls industry,
capital, and wealth, thus stifling private competition
• Incentives for entrepreneurship are few: there is no
guarantee that the individual will profit from innovative ideas
or the development of new technologies
• Economic freedom is not a valued principle-the state
determines how the factors of production will be allocated
• Examples: North Korea, China, Iran
• Not all centrally planned economies are properly referred to
as ‘communist.’
21. Infrastructure
• Consist of the basic support systems
needed to keep an economy going
including power, communication,
transportation, water, sanitation, and
education systems.
25. • Per capita income-the amount of money the
average person makes each year in a
country. Generally, this statistic is generated
by dividing a country’s GDP by its population
• Gross National Product (GNP)-the total value
of all goods and services produced by a
country over a year.
• Gross Domestic Product (GDP)-the total
value of all goods and services produced
with in a given period of time
Economic Indicators
26. • Aka Developed
• A high income country with a mature
industrial sector and whose residents
enjoy a relatively high standard of living.
• Primary industries tend to be highly
mechanized
More Developed Country
27. • Aka Developing
• Usually a low or middle income country
whose economy is either mostly agrarian
or only partially industrialized
Newly Industrialized Country
28. • Aka underdeveloped
• A low income country that is unable to
provide basic necessities, such as job
opportunities, health care, drinkable water,
food, education, and housing
Less Developed
