economy geography (5)

• Until the world began to run on gasoline-powered machinery, oil was used for a variety of purposes
• Uses of oil


  • Medicinal purposes (Native Americans)
  • Dressing for wounds (Egyptians)
  • Wrapping oil-soaked fibers around arrows, lit them, and fired them into the city of Athens in 480 B.C. (Ancient Persians)
• Sometimes a resource only becomes valuable after the technology to use it is developed
• In today's world, petroleum is vital to providing power for industry, commerce, and transportation
• Petroleum plays a powerful role in the economies of nations that supply it and consume it
• Economy


  The production and exchange of goods and services among a group of people
• Types of economic systems

  • Traditional Economy (Goods and services are traded without exchanging money)
  • Command Economy (Production of goods and services is determined by a central government, which usually owns the means of production)
  • Market Economy (Production of goods and services is determined by the demand from consumers)
  • Mixed Economy (A combination of command and market economies)
• Traditional Economy


  • Also called "barter"
• Command Economy


  • Production does not necessarily reflect the consumer demand
  • Also called a planned economy
• Market Economy


  • Also called a demand economy or capitalism
• Mixed Economy


  • Provides goods and services so that all people will benefit
• Economic behaviors and activities to meet human needs take place within these economic systems
• Economic activities


  • Depend on the resources of the land and how people use them
  • The level of economic development can be measured in different ways
• Places & Terms


  • economy
  • economic system
  • command economy
  • market economy
  • natural resources
  • infrastructure
  • per capita income
  • GNP
  • GDP
• Subsistence agriculture involves raising enough food or animals to meet their need to eat, but have little left over to sell to others
• Market-oriented agriculture produces crops or animals that farmers sell to markets
• Cottage industries


  Small industries that often involve a family of craftspersons who produce goods to be sold in a local area
• Commercial industries


  Meet the needs of people within a very large area
• Levels of economic activity

  • Primary Activities (Gathering raw materials)
  • Secondary Activities (Adding value to materials by changing their form)
  • Tertiary Activities (Providing business or professional services)
  • Quaternary Activities (Providing information, management, and research services by highly-trained persons)
• The more developed an economy is, the greater the number and variety of activities you will find
• Natural resources are materials on or in the earth—such as trees, fish, or coal—that have economic value
• Types of natural resources

  • Renewable (Can be replaced through natural processes)
  • Non-renewable (Cannot be replaced once they have been removed from the ground)
  • Inexhaustible energy sources (Result of solar or planetary processes and are unlimited in quantity)
• The value of a natural resource depends on the qualities that make it useful
• Countries trade for raw materials that they need for energy and to manufacture products
• Infrastructure


  The basic support systems needed to keep an economy going, including power, communications, transportation, water, sanitation, and education systems
• The more sophisticated the infrastructure, the more developed the country
• Transportation patterns affect economic growth
• Communications systems indicate how a country is linked internally as well as with the outside world
• The level of available technology and access to it is an indicator of the development of a country
• Per capita income


  The average amount of money earned by each person in a political unit
• GNP (Gross National Product)

  The total value of all goods and services produced by a country over a year or some other specified period of time
• GDP (Gross Domestic Product)


  The total value of all goods and services produced within a country in a given period of time
• Levels of economic development

  • Developing nations (Low GDP and limited development on all levels of economic activities)
  • Developed nations (High per capita income and varied economy, especially with quaternary activities)