AP Human Geo Unit 7

cottage industry

small-scale businesses, typically operated out of a person’s home (individuals use traditional techniques to produce by hand)

• prevalent before Industrial Revolution

enclosure movement

In England, which took agricultural land that was publicly owned by the community and privatized it.

• output of farms more efficient!

• small farmers left rural areas and to urban areas

Industrial Revolution led to…

• mechanization of farming

• larger market with better transportation (like steam engine)

• rise of middle class

Industrialization led to imperialism because

nations sought more raw materials(gold, iron, rubber, oil, diamond)

• Berlin Conference

Primary sector

extraction of natural resources

secondary sector

use raw materials to manufacture to products

• often near to primary sector to reduce transportation cost

• located near transportation infrastructure

value-added product

products that have been processed in a way that increases their overall value

• wheat into flour, strawberry to jam

tertiary sector

jobs and activities that provide a service for other individuals

• often near consumers (but changed due to development of technology)

• lawyers, doctors

Quaternary sector

part of tertiary sector; centered around information collection, processing, sharing

• journalist, teachers

quinary sector

part of tertiary sector; centers around making decisions

• senator, CEO, executives

industrialization & emerging economy affects sectors of economy by…

dominating sector of economy shifts to primary→secondary→tertiary

core countries

countries with the most advanced economies and highest standard of living

semi-periphery countries

countries that have emerging economies that are industrializing

• located between core & periphery countries in terms of development

periphery countries

countries that still rely heavily on the exportation of raw resources to more economically developed countries

multinational corporation

company that has business operations in at least one country other than its home country

break of bulk point

a location where goods are transferred from one mode of transportation to another

• ports; cargo ships→ trucks

Alfred Weber’s Least Cost Theory

location of production should be in a place where transportation cost and labor cost is minimized, and economic benefit of agglomeration is maximized

agglomeration

clustering of different economic activities and industries in a specific geographic area

• leads to shared resources, labor pools, and infrastructure

bulk reducing good

product that becomes lighter and easier to transport as production occurs

• have heavy and bulky raw resources

• more transportation cost

bulk gaining goods

product that becomes heavier and more difficult to transport as production occurs

• resources are more lighter

criticisms of Alfred Weber’s Least Cost Theory

• oversimplifies factors that influence location of production

→ like: government policies, cultural preferences, environmental concerns

formal economy

economic activities recognized by law and are overseen by the government

• doctors, teachers, servors

informal economy

economic activities that are not regulated by the government

• street vendors, domestic work, small businesses

• don’t have consistent income

• no legal protection

• hard to measure

GDP

total value of all goods/services produced within a country’s borders over a specific amount of time

• consumption + investment + government spending + (exports-imports)

Gross National Product (GNP)

total economic output produced by a country’s residents and businesses, regardless of their location, during a specific time period

• Toyota in the US would count as US GDP & Japan’s GNP

if GNP>GDP…

• more number of citizens living abroad

• lot of foreign investment & production with country’s borders

Gross National Income (GNI)

total amount of income generated by a country’s residents and businesses, both domestically and abroad, in a given year

• different from GNP, which calculates value of all goods/services produced

Gender Inequality Index (GII)

composite index that measures gender-based inequalities in health, education, and economic participation

• inequality in reproductive health, empowerment, labor market

• between 0-1

• higher=more inequalities

Human Development Index (HDI)

an index that is used to measure the social and economic development of a country

• looks at: life expectancy, expected years of schooling, gross national income per capita

• 0-1

• higher=more human development

global gender gap index uses…

• economic participation and opportunity

• educational attainment

• health and survival

• political empowerment

informal economy lack

• health insurance

• paid sick leave

• guaranteed minimum wage

• sexual harassment laws

women in informal economy

less economically developed countries have more gender gap

→ lower education, discrimination

→ women have larger participation in informal economy

bank accounts allow

• store money

• access credit

• expand business

solutions to solve gender gap

microloans: small loans to who are typically excluded from traditional banking services

• support small businesses

microfinancing: category of financial services who lack access to traditional banking services

• access to savings account, insurance, money transfer services

• supported by NGOs

Rostow’s stages of economic growth (development)

(from bottom to top)

• traditional society

→ subsistence farming

• preconditions of takeoff

→ more infrastructure, investment, education

→ more jobs in secondary sector

• takeoff

→ more secondary sector activities

→ increased urbanization, advanced technology

→ foreign nations take advantage of other nations

• drive to maturity

→ state specializes more, focus on global trade

→ more tertiary sector jobs

→ focused on producing consumer good

• High Mass Consumption

→ majority of jobs to tertiary

→ state is independent

→ economy centered around consumption than manufacturing

dependency theory

theory that suggests that developing countries are dependent on developed countries for their economic growth

why don’t economically developing countries negotiate better terms of trade?

core countries.multinational corps would turn to other developing countries

Wallerstein’s world system theory

views the global economy as a interconnected system of Core, Semi-periphery, and Periphery countries.

• wealth flows from periphery to core countries

• dependency and uneven power structure

• affected by colonization

• doesn’t account for NGO’s microfinancing & microloans

commodity dependence

when a country has more than 60% of its total exports made of just commodities

• makes country’s economy vulnerable with price change (limits development)

• Venezuela is commodity on dependent petroleum

→ 2014, when oil prices fell, collapse of economy

why trade

• gain raw materials

• get new technology, ideas

• specialize to product service/good

• strengthen political relationship

complementarity index score

measure used in economics and trade to assess the compatibility between the products and services that two countries produce and trade with each other

• compares exports & imports

• 0-100

• higher score=more likely to trade

comparative advantage

when countries have lower opportunity cost to produce compared to other countries

• specialization leads to countries able to produce efficiently & export surplus & imports other products

tariff

tax imposed by government on imports

• reduce trade and encourage domestic production

neoliberalism

economic and politic ideology that emphasizes individual freedom over government control, free markets, and free trade

• free trade

• WTO, IMF, Mercosur(South America), EU, OPEC

• NAFTA

OPEC

union of oil producing countries

• controls supply & price of oil

cons of neoliberalism

• in favor of wealthier nations

• deregulation from government can lead to unethical behavior

• economy instability of developing countries as there is more competition

• vulnerability of economy to global issues

• more competition with global workforce

economic reconstructing

significant shift in production, employment, investment, trade patterns, or underlying economic systems and process

offshoring

process of relocating a business process or service to a foreign country

advantages of offshoring

• lower labor costs

• tax incentives

• favorable economic conditions

outsourcing

when a business contacts out a service or job to an external provider in order to reduce their costs and increase their efficiency

economies of scale

as a company grows it is able to reduce the average cost to produce its product

international division of labor

concept that describes how countries utilize their comparative advantage to specialize in different economic activities, resources, and capabilities

special economic zone

regions within country that provide economic incentives to attract foreign investment and economic growth

• tax breaks, less regulations, access to services

Free Trade Zones

regions where imported goods can be stored & processed without tariffs or trade barriers

• is special economic zone, centered around ports

export processing zones

regions in a country that offer special economic regulations and incentives to promote the production of good/services for export

• is special economic zone

• e.g. Maquilladora in Mexico

multiplier effect

phenomenon where an original investment by an individual, business, government, or organization leads to a chain reaction of spending and icnreased economic activity

fordism

system of production that emphasizes mass production of standard goods

post-Fordism

system of production that emphasizes more flexible production methods where workers are trained in multiple tasks and produce custom goods

Just-in-time delivery

production and inventory control system where products and materials are delivered to the manufacturing plant precisely when they are needed in the production process

agglomeration

clustering of different economic activities and industries in a specific geographic area

growth poles

specific regions, cities, or economic sectors that are considered as centers of economic growth

• Silicon Valley

• Dubai, for business and tourism

deindustrialization

decline of industrial production in an economy

sustainabiltiy

use of Earth’s resources that ensures availability in the future

resource depletion & land degradation is led by

• consumerism

• more land usage (like irrigation, farmland…)

• increased energy demand (fossil fuels)

ecotourism

• promote conservation of environment

• learning local culture

When sustainable development is encouraged(like SDGs)…

• higher standard of living

• more economic, social opportunities for individuals

• protect environment