AP HUGS unit 7.7

Weber's Least Cost Theory

Weber's least cost theory is an economic theory that proposes that firms will choose the production methods that minimize their costs, in order to maximize their profits. According to the theory, firms will consider a variety of factors, including the cost of labor, raw materials, and capital, as well as transportation and other logistics costs, when deciding how to produce a good or service.

Agglomeration

Agglomeration refers to the clustering of economic activity in a particular area or region. This can occur for a variety of reasons, such as the availability of skilled labor, access to transportation and other infrastructure, and the presence of complementary industries. Agglomeration can lead to increased efficiency and productivity, as firms can take advantage of the benefits of being located near other firms and institutions.

Growth Poles

Growth poles are centers of economic activity that are targeted for development in order to stimulate economic growth and development in a particular region. The idea behind growth poles is that by focusing development efforts on a particular area, it is possible to create a virtuous circle of economic growth that spreads to the surrounding region.

Just-In-Time Delivery

Just-in-time delivery is a production and logistics management system that aims to minimize inventory and reduce waste by delivering goods and materials to the production process just in time to be used. The goal of just-in-time delivery is to reduce costs and increase efficiency by eliminating the need to hold large inventories of raw materials and finished goods.

Post-Fordist Production

Post-Fordist production refers to a shift in the way goods are produced, characterized by a move away from mass production and towards more flexible, customized production methods. Post-Fordist production often relies on advanced technologies, such as automation and computerization, and it is often more responsive to changes in consumer demand.

Economies of Scale

Economies of scale refer to the cost advantages that a firm can achieve by increasing its scale of production. As a firm increases its production, it may be able to reduce its average costs by taking advantage of various efficiencies, such as purchasing raw materials in larger quantities or using specialized production equipment.

Special Economic Zones

Special economic zones (SEZs) are designated areas within a country that have special economic regulations that are more favorable than the regulations that apply in the rest of the country. SEZs are often established to encourage economic development and attract foreign investment.These areas typically feature tax incentives, streamlined regulations, and improved infrastructure to promote export-driven growth.

New Asian Tigers

The New Asian Tigers refers to a group of rapidly developing economies in East Asia, including countries like Vietnam, Thailand, and Malaysia, that have shown remarkable economic growth and industrialization since the late 20th century. These nations have become increasingly integrated into the global economy, driven by export-oriented manufacturing and foreign direct investment.

Newly Industrialized Countries (NICs)

Newly Industrialized Countries (NICs) are nations that have recently transitioned from primarily agrarian economies to more industrialized and urbanized economies. This shift is often marked by rapid economic growth, increased manufacturing output, and a rising middle class, which collectively signify a significant transformation in their integration into the global economy.

Offshoring

Offshoring is the practice of relocating business processes or production to another country, often to reduce costs or increase efficiency. This strategy is commonly used by companies seeking lower labor costs, tax benefits, or access to specialized skills.

Outsourcing

Outsourcing is the practice of delegating specific tasks or services to external companies or individuals, often in different countries, to reduce costs and improve efficiency. This approach has become a significant feature of the global economy, as businesses seek to optimize their operations by leveraging lower labor costs and specialized expertise found abroad.