World Economic Activity

Millions of people ride trains, cars, buses or bicycles for transportation

daily.

Economic Activities

• People acquire their wants and needs through different activities:– Primary Activities– Secondary Activities– Tertiary Activities – Quaternary Activities

Primary Activities• Rely directly upon natural resources. – Ex. Fishing, mining, farming.

• Primary economic activities are located near the natural resources that are being exploited.– Ex. Tin mine located at site of tin deposit.

• Oldest forms primary activity. – Ex. Hunting, gathering and herding.

Lapps Herding

Nomadic style. They travel from place to place in different seasons. During the Winter they keep their reindeer in protected valleys. During the summer they move them to high alpine meadows to graze.

Primary Activity Continued…• Most important economic activity in world?– Farming

• Developing countries - high # of farmers, developed countries do not. (US = 10%)

• People use a variety of farming methods.– Subsistence Farming– Commercial Farming

Subsistence Farming• Agriculture type in developing countries.• People only grow enough food for their own

family or village. • They grow food to eat not sell.• Very basic tools, very time consuming. • Animals and family provide main source of

labor.

Commercial Farming• Advanced economy = farmers raise crops and

livestock to sell.• Modern techniques and equipment make

farming more productive. – (Takes less people to do work, Japan 7%)

• Some commerical farming takes place in developing countries (ex. Bananas, coffee, sugar).

Secondary Activity• Use of raw materials to produce or

manufacture new products of greater value.– Processing wheat into flour, lumber into plywood

and the production of electricity.• Secondary activities in a subsistence economy

are called cottage industries. – Use little advanced tech. – Take place in or near people’s home.

Secondary Activity Continued…

• Commercial industries– Hundreds or thousands of people work in large

factories– Turn out large quantities of manufactured goods– Ex. Clothes, cars, appliances, heavy machinery

Commercial Industries continued…

• Considerations affect location of secondary activities. – Factories built near needed raw materials – Location depends on raw material or finished

good shipping costs– Ideal location consists of skilled workers, low labor

costs, low energy costs and access to easy transportation.

Tertiary Activities• Service industry (They serve others).– Lawyers, doctors, salespersons, firefighters,

officers.• People engaged in this work do not directly

gather or process raw materials. • These activities are located wherever people

live and work.

Quaternary Activities• Jobs that include focus on acquiring,

processing and sharing information.– Education, government, information processing

and research.• Because of advanced technology can be

located anywhere.– Clustered in regions of highly educated workers

and excellent communication networks.

Global Trade Patterns

• American farmers do not plant what they desire, instead they plant what the soil allows.

• Because of this, they establish trade network.• Items in abundance are sold to other countries

and vice versa. • Goods that are sent out of the country are

exports.• Goods that are brought into the country are

imports.

Trade Balance• Government seeks a favorable balance between

imports and exports.– Sometimes they limit imports by imposing taxes on

foreign goods• Excessive imports can damage nation’s economy.– Purchasing too many foreign goods can cause domestic

businesses to lose profits and fail. – Rise in unemployment– Increase of nation’s debt to other countries

Trade Routes• Determined by geography, technology, and

international relations. – Ex. Spice Trade of the 1500s

• European merchants sailed around Africa to trade for spices in East Asia.

• Had to go by boat because of natural divisions and unfriendly territories.

• Today, electronic trading is possible. – Business deals and payment happens via computer

and satellite networks.

Levels of Development

• Economic activities and trade patterns influence a country’s level of development.– Developed = Modern industrial societies.• France, U.S. and Japan

– Underdeveloped = Lack industries and technology.• Depend upon developed countries.

– Developing = showing evidence of political, economic and social progress

Stats used to Measure Development

• Comparing wealth by GDP (Gross Domestic Product) …

• GDP = the total value of goods and services produced in a country in a year divided by the total population. – Greater in developed countries

Developed countries

• Developed countries enjoy a high standard of living due to higher levels of education and health care.

• Also have more transportation and communication facilities per person.

• More cars, airports and highways.• Telephones, newspapers, tvs and computers.• Higher food consumption