Unit 7 Flashcards

(124 cards)

1
Q

Industry

A

The process of using machine and large-scale processes to convert raw materials into manufactured goods.
Needs raw materials

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2
Q

Raw materials

A

Basic substances, like minerals and crops, needed to manufacture finished goods

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3
Q

Cottage Industries

A

Small home-based businesses making goods. Depend on intensive human labor as people used simple tools.
Most people had these kind of business before 18th century.

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4
Q

When was the Industrial Revolution?

A

18th century

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5
Q

Industrial Revolution

A

Series of technological advances, resulting in more complex machinery driven by water/steam power that could make products faster and cheaper than cottage industries.
Started in Great Britain.

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6
Q

Describe the diffusing pattern of the Industrial Revolution

A

Great Britain -> (mid 1700s, rapid) France/Netherlands -> (mid-1800s) Germany, US -> (early 1900s) reach all of Europe, Japan, parts of China, South America.
Today, most of the world is industrialized.

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7
Q

Manufacturing shifted from cottage industries to factories because..

A

It was more efficient, cheaper, faster.
But the wealthy consumers are willing to pay more for high-quality handcrafted products than mass-produce, so cottage industries are still important.

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8
Q

On a local scale, investors originally considered 3 factors on the location of factories.
Now, why did it diminish in importance and which additional factor emerged?

A

1) Energy resources to provide power (rivers/coal deposits)
2) Minerals/agri. products needed to produce goods
3) Transportation routes
In the 19th century, new forms of energy and transportation was developed, so factories could be built in more diverse locations. However, as factories grew larger, location near large workforce became more important -> factories cluster around cities

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9
Q

Describe how growth of cities and factories reinforce each other

A

Factory work attract people to cities, who provide market for factory goods, and greater availability of goods attract more people -> rapid urbanization

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10
Q

Describe the class structure before the industrial revolution

A

Tiny class of elites
Small class of merchants, clergy, people using more knowledge than physical labor
Large class of workers on farms/in craft.

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11
Q

How did industrial revolution affect class structure?

A

Expanded the middle class as industries needed factory managers, accountants, lawyers, clerks, and secretaries.
Demand for workers who can read/write increase -> higher demand for teachers and professors.

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12
Q

How did the Industrial Revolution affect ppl in rural areas?

A

Mechanization of agriculture displaced people, but those who could stay benefited from increased productivity.

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13
Q

How did the Industrial Revolution affect the urban working class?

A

They had hard/dangerous jobs, lived in crowded conditions in polluted areas, and often couldn’t afford to purchase the products they made.

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14
Q

How did the Industrial Revolution affect the urban middle class?

A

People in the expanding urban middle class had more comfortable lives and enough income to purchase low-cost manufactured goods.

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15
Q

How did the Industrial Revolution affect the business-oriented class?

A

Some factory owners, bankers, and others in business in urban areas became extremely wealthy.

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16
Q

How did the Industrial Revolution affect landowners?

A

Landowners often maintained control of land, but lost their influence in society to the rising business-oriented class

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17
Q

Describe how cities grew outward and upward

A

Horizontal: improvements in intra-urban transportation (trains, cars, trucks) allow cities to spread out farther from downtown core. People can live farther from workplace and still commute to work. Producers can transport food from the countryside to cities to feed the growing population.
Vertical: Development of elevators, stronger and affordable steel, and techniques to construct stronger foundation -> taller buildings -> denser city population, public health measures become increasingly important.

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18
Q

Describe how Industrial Revolution built on earlier rise of imperialism

A

Countries like Great Britain and France desire to control trading posts/colonies to provide various resources:
o Raw materials (sugar, cotton, foodstuffs, lumber, minerals for mills/factories
o Labor to extract raw materials
o Markets to sell finished products
o Ports where trading ships can stop to get resupplied
o Capital from profits for investing in new factories, canals, railroads.

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19
Q

Describe the effects of imperialism + industrial revolution

A

By early1900s, several European countries and US had colonies around the world.
Made wealthy countries wealthier. Greater divide between industrialized and unindustrialized states.

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20
Q

Industrial Belt

A

Stretching across midlatitudes of Northern Hemisphere (Northeastern/midwestern US, much of Europe, part of Russia, Japan)
For most of 20th century, industrialized regions often found in large urban areas providing workforce, along coasts and rivers.
However… end of 1900s deindustrialization

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21
Q

Deindustrialization

A

Process of decreasing reliance on manufacturing jobs.
As a result of improved tech, companies need fewer employees to produce same quantity of goods. Manufacturing companies transfer production to semiperiphery countries like China, India, Mexico where they pay workers low wages and avoid regulations designed to protect workers/environ.
Workers in deindustrializing core fought against this process, but with limited success -> rust belts

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22
Q

Rust belts

A

Regions with large number of closed factories. US Midwest and Northeast, because starting in 1950s and 1960s experienced decline in manufacturing activities -> unemployment, poverty, population loss

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23
Q

What is the Primary Economic Sector?

A

Focused on extracting natural resources from Earth.
Farming, mining, fishing, forestry.
Dominated the economy until late 1800s, low-wage and high-risk jobs. A small part of today’s economy, many require physical labor.

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24
Q

What is the Secondary Economic Sector?

A

Focused on making products from natural resources.
Manufacturing, building
Significant growth from 1840-1960s. Wages vary greatly.

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25
What is the Tertiary Economic Sector?
Focused on providing information/services to people. Retail sales, medicine, housekeeping. A small part of the economy until mid-1900s. Most people in US labor force today, wages vary greatly.
26
What is the Quaternary Economic Sector?
Focused on managing/processing information. Financial analysis, software development, data science. Small percentage of employees, most require advanced education/technical skills. High wages.
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What is the Quinary Economic Sector?
Focused on creating information and making high-level decisions. Research, top managers in corporations/government. Very small percentage of employees. Very high wage. Decisions affect millions of people.
28
What is the multiplier effect?
The potential of a job to produce additional jobs/opportunities. Ex. when a plant adds 100 new jobs, new workers have more money to spend on other products -> expansion of other businesses/jobs. Secondary sectors
29
What is bulk-reducing industry?
Industries that use raw materials that lose bulk while processing. Since transporting extracted material is expensive than transporting the finished product, move production site closer to sources to save $.
30
What is bulk-gaining industry?
Industries whose goods become bulkier as processing occurs, so companies locate closer to the market.
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Bulk
Weight and size of goods.
32
What is the 3 factors that Alfred Weber thought factory owners would consider when locating factories?
Minimize transportation costs Minimize labor costs Maximize agglomeration economies 1909 least cost theory, locational triangle
33
Agglomeration economies
Spatial grouping of several businesses to share costs (ex. access to transportation networks, workforce with a special skill)
34
Reverse multiplier effect
When one job shuts down, making other people lose their jobs too. Ex. gov in deindustrializing regions attempt to replace lost manufacturing jobs w/ new quaternary and quinary jobs. However, displaced workers don't possess the skills required -> many end up in the tertiary sector with less pay.
35
What are the limitations of Weber's least cost theory?
-X differentiate between labor types -X differentiate source of energy -Transportation mechanism improved since then -Government (safe/peaceful, incentives like tax breaks)
36
Containerization
System in which goods are loaded into a standardized shipping unit Are intermodal
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Intermodal
Can be carried on a truck/train/ship/plane
38
Footloose
Businesses that are able to pack up and leave for a new location quickly and easily. Online businesses
39
Describe theories of August Losch and Harold Hotelling
August Losch: assumed businesses want to maximize costs, even if meant higher cost Harold Hotelling: businesses choose a location based on where their competitors were located (locational interdependence)
40
World Systems Theory
Immanuel Wallerstein, where factories/businesses locate that shapes wealth/power of countries. Core: quaternary and quinary sectors (US, Japan, Australia, Europe) Semiperiphery: factories. As these countries develop, skills/wage increase, so they add more tertiary sector jobs and lose secondary sector jobs to lower-wage countries (China, India, Brazil, Mexico) Periphery: primary. Poor infrastructure makes it difficult to attract jobs in other sectors (Bangladesh, Bolivia, Cambodia, Africa)
41
What are the 3 measures of development?
GNP, GNI, GDP
42
GNP and GNI
Gross National Product (GNP) and Gross National Income (GNI) is the dollar amount of all goods and services produced by a country's citizens in one year, regardless of where the money is earned.
43
GDP
Gross Domestic Product (GDP) is the dollar amount of all final goods and services within a country in one year.
44
Remittances
Profits from a foreign-owned company leaving the country and going back to the home country. Ex. immigrants sending money home to families
45
Per capita
Amount per person Total output / total population
46
Purchasing power parity (ppp)
Measure of what similar goods cost in different countries. Influenced by transportation costs, value of currency, etc.
47
To make comparison of development (GDP, GNP, GNI) easier, what are the ways?
Per capita ppp (purchasing power parity)
48
Formal sector
portion of the economy monitored by the government (people follow regulations and pay taxes, measured by GDP, GNP, GNI)
49
Informal sector (underground economy/shadow economy)
Portion of the economy X monitored by gov. Activities done w/o pay like cooking for a friend who is sick, Activities that are legal if reported to the gov but often not (tips earned by restaurant workers), illegal activities.
50
Gini coefficient/index
Value ranges between 0-1. Higher the number, the higher the degree of income inequality. (0 means no inequality, everyone has equal pay. 1 - person has all income) Periphery and semiperiphery have higher gini index -> reflects small # of middle-income people
51
Describe spatial patterns of economic development
Africa and South America: average income is low. 20% of the world population, but only 8% of world’s GDP. Asia: largest income gains. 60% of world population and 37% of global GDP. North America and Europe: prosperous. 16% of world population, 55% of global GDP. Western Europe and US are wealthiest.
52
Describe social measures of development
Total Fertility Rate (TFR) and Infant Mortality Rate (IMR): Negative/inverse correlation with wealth and development Life expectancy: positive correlation with development. However, since it is also related to availability of adequate healthcare, poor countries that invested in healthcare increased their life expectancy. Literacy rate – Positive correlation with development. More males, females in poor countries less.
53
Literacy rate
Percentage of the population that can read and write, usually at 8th grade level or higher.
54
Gender Gap
Differences in privileges given to males and females in a society
55
GII
Gender Inequality Index - reported by UN’s Human Development Report since 2010, composite measure of several factors indicating gender disparity: reproductive health (maternal mortality rate, adolescent fertility rate), empowerment (gov. seats held by each gender/proportion of adult and males w/ at least some secondary education), labor market participation (rates of female/male pop aged 15 or older Composite score is a measure of percentage of human development lost due to gender inequality. (ex. GII for Switzerland indicate they lost only 2.5% of potential human development)
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Maternal mortality rate
Death of a mother during birth, # of maternal births per 100,000 live births per year.
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Adolescent fertility rate
of births per 1,000 women aged 15-19
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HDI
Human Development Index -1 economic measure (GNI per capita) 3 social measures (Life expectancy, Expected years of schooling, Average years of schooling) Composite scores range 0-1, higher represent greater levels of development
59
Countries that rank higher on HDI than income
Israel and Cuba, because they invested heavily in education and medical care
60
Countries that rank higher in income than HDI
Qatar, because they are rich in oil and natural resources.
61
Gender parity
men/women have equal opportunities
62
Much of work that women do are (formal/informal), and if they get paid, they are paid (more/less) than male counterparts
informal less
63
What are 3 barriers to gender parity?
For women: Cultural barriers inhibit participation in economy Lack of educational opportunities reduce employment options Limited access to loans and other resources make starting/expanding resources difficult
64
Glass ceiling
invisible but persistent barriers that prevent women and members of marginalized groups from achieving leadership positions and higher-level roles despite their qualifications.
65
What are some ways opportunities increased for women?
Transnational corporations open more factories in developing countries, often employing women as they are readily available (esp. in countries with low birth rates) and work for lower wages. Increased edu. opportunities prep more women to work outside from low-paying domestic jobs to higher-paying manufacturing jobs NGOs - microedit/microfinance UN Sustainable Development Goals for women
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Microedit/microfinance
programs to provide loans (often to women) to start/expand a business. Grameen Bank (founded in 1983 Bangladesh), particularly active in South Asia and South America. Repayment for these programs is high - 98%
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What are the effects of women getting opportunities/voice?
Decreased birth rates Increased wealth allows for better nourishment of children -> decreased child mortality
68
Stages of Economic Growth Model
developed in 1960 by American economist Walt W. Rostow, modernization theory focusing on shift from traditional to modern forms of society. * Assumed all countries wanted to modernize and all would. * Generalization based on how US and Western Europe evolved * Suggest different inputs/levels of investment required to allow countries to move from one stage to the next. Suggests system for development.
69
Describe Stage 1 of Rostow's Stages of Economic Growth Model
Traditional Society -depend on primary sector activities for subsistence -use limited technology -local/regional trade -limited socioeconomic mobility (no entire country at this stage today. Medieval Europe)
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Describe Stage 2 of Rostow's Stages of Economic Growth Model
Preconditions for Take-Off -improved infrastructure, farming techniques -> shift toward commercial agriculture -intl trade, exporting agri. and raw materials -diffuse technology more widely -start having individual socioeconomic mobility (Nigeria, Afghanistan, US 19th century)
71
Describe Stage 3 of Rostow's Stages of Economic Growth Model
Take-Off -develop major tech innovations -industrialization, primary sector shrinks -spread entrepreneurial mentality -urbanization -initiate self-sustaining growth (Bangladesh, US mid-19th century, Japan late 19th century)
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Describe Stage 4 of Rostow's Stages of Economic Growth Model
Drive to Maturity -create new industries while strengthening existing ones -improved energy, transportation, communication systems -economic > pop growth -invest in social infrastructure (Brazil, US late 19th century)
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Describe Stage 5 of Rostow's Stages of Economic Growth Model
High Mass Consumption -consumerism -desire to create more egalitarian society -strong tertiary sector (US early 1920s-, Japan mid 1950s-)
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Consumerism
Spending money on nonessential goods
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Egalitarianism
Social and political philosophy that emphasizes the fundamental equality of all people.
76
Describe the criticisms of Rostow's Stages of Economic Growth Model
Limited examples (US/Western Europe only) Led to poorer countries trapped in dependency, exploited by wealthier countries Bias towards progress, linear change always in direction of progress. Some countries may regress/need assistance Fails to consider carrying capacity of earth, not everyone can lead life of high mass consumption Fails to recognize need for poorer countries (most countries reach stage 5 by exploiting LDCs) Only focus on domestic economies, X address interactions between countries
77
World Systems Theory
developed by Immanuel Wallerstein in 1970s as an alternative to Rostow’s. Also referred to as Core-Periphery model. dependency model - countries X exist in isolation, instead are part of interdependent world system. Doesn't suggest all countries can reach highest level of development, nor explain how it can reach it
78
Describe characteristics of Periphery countries in Wallerstein's World Systems Model
-LDCs -jobs in low-skill, labor-intensive production/extraction -provide core/semiperiphery w/ inexpensive raw materials and labor -attract jobs bc weak laws protecting laborers/environment (Afghanistan, Bolivia, Laos)
79
Describe characteristics of Semiperiphery countries in Wallerstein's World Systems Model
-middle-income economies -provide core w/ manufactured goods/services that core formerly provided for itself -shares characteristics of both core and periphery (China, Mexico, Brazil, South Africa, India)
80
Describe characteristics of Core countries in Wallerstein's World Systems Model
-economically advantaged -headquarters of most large multinational companies/banks -> increased dependency for semi/periphery -high-skill, capital-intensive production -promote capital accumulation -dominate semiperiphery and periphery economically and politically -locate factories/service scenters in semiperiphery/periphery -benefit greatly from intl trade
81
Describe criticisms of Wallerstein's World Systems Model
-little emphasis on culture, only on economic investments, ignore entertainment -Based on industrial production, but many countries have postindustrial economies based on providing services -lack of explanation on how countries can change their status -> limited practical use -fails to recognize roles of NGOs
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Commodities
Raw materials such as coffee, cocoa, and oil (no processing)
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Commodity dependence
Country has >60% of its exports as raw materials. Value of commodities rise as degree of processing increases, commodity dependence is strongly correlated with low levels of economic development. More than half the countries in the world; sub-Saharan Africa, Latin America, and Caribbean region.
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Comparative advantage
Ability to produce a good/service at a lower cost than others
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Complementary advantage
when a country has surplus of the income/goods/services that another country desires, leading to a mutually beneficial trade When this X exist, trade is heavily weighted in one direction, creating political tensions. (ex. US consumers desire/can afford many products made in China, but Chinese consumers desire/can afford fewer US products)
86
What are some improvements in tech that promoted trade?
Larger/faster ships, containerization make moving goods less expensive Internet increase efficiency of trade/transportation information systems. Plus, online sales expand the market for both consumer and producers -> increased demand and trade
87
Neoliberal policies
Set of reforms that reduce gov. regulations/taxation 1980s US president Regan and UK Prime Minister Margaret Thatcher were leading advocates
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Example of tax breaks
tax holiday (temporary exemption from some taxes) tax break for money invested in research and development
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Forgivable loans
Part or all of the loan doesn't have to be repaid
90
Tariffs
Taxes imposed on imported products to make them less attractive, and domestically produced goods more attractive
91
What are 5 types of incentives gov. initiate to promote economic growth?
Tax breaks, loans, direct assistance (ex. subsidy for each full time job created), changes in regulations (legislation weakening unions), tariffs
92
Supranational trading blocs
Trading blocs – groups of countries that agree to a common set of trade rules. (ex. USMCA, OPEC, Mercosur/Southern Common Market – includes several South American countries)
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WTO
World Trade Organization, created in 1995 to monitor rules of international trade by providing a forum for negotiating trade deals, settling disputes, supporting needs of developing countries, etc.
94
International financial institutions (IFI)
Assist struggling countries with financing and provide professional advice on development. Partnership among several countries, some focus on particular regions/type of projects. IMF is best known IFI, fund projects
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International Monetary Fund (IMF)
best known IFI, created in 1945 to aid countries in need of financial assistance. Can take several forms: new, manageable loans -TO- overhauling country’s economic system. Also facilitate intl trade, increase employment, etc. Destabilization of Argentinian economy in 2018 (%57B)
96
Microlending
Designed to help entrepreneurs in small-scale businesses by providing small loands (<$2000)
97
Outsourcing
Contracting work to noncompany employees or other companies. Is cheaper because it is specialized in the work/does it efficiently or might pay lower wages/provide fewer benefits to workers. (manufacturing work and administrative functions like payroll and paying taxes)
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Offshoring
relocating business operations, services, or production processes to another country, usually to take advantage of lower labor costs, taxes, or regulations.
99
Reshoring
returning jobs to the business’s home country, Pressured by labor unions and government officials to do so.
100
New International Division of Labor
Changed system of employment in various economic sectors throughout the world Core: design/develop products (tertiary, quaternary, quinary) Semiperiphery: manufacture goods (primary decrease, secondary increase) Periphery: primary sectors, export raw materials for further processing/consumption
101
Basic economic activity
Actions that create NEW wealth for a region (commercial farm products) City-forming activities
102
Non-basic economic activity
Actions that don't generate NEW money for the area, instead recirculation of the existing money. Limited multiplier effect. (grocery stores) City-serving activities
103
Describe concern in communities of core countries, from loss of manufacturing jobs
Manufacturing jobs are often basic activities generating new wealth. Jobless will find a job in tertiary sector, which consists of non-basic jobs, and community will lose out on needed money.
104
Transnational corporations (TNCs) and Multinational corporations (MNCs)
Businesses that operate in multiple countries. Because they offer lots of jobs/wealth opportunity, governments compete with each other to attract these corporations -> EPZs
105
EPZs
Export-processing zones, offering major tax breaks, cheap labor, fewer environmental regulations, well-serviced industrial sites, and proximity to good transportation networks. Often near airports, seaports, or land borders Transnational companies X pay taxes on any item they import into EPZ as long as they are re-exported -> protects existing businesses. Initially occupied by factories, now some act as transshipment points and sites for tertiary/quaternary sector activities.
106
EPZ in China
Special Economic Zones (SEZs)
107
EPZ in Mexico
Maquiladoras. 2nd largest source of income after petroleum, after the surge of American-owned factories appeared after the 1994 NAFTA was signed. Originally all situated on single district in the North to minimize transportation costs. Decreased due to competition as more countries adopt EPZ as a development strategy
108
EPZ in Singapore
Free-trade zones (FTZs): locations where foreign company can store/warehouse/transfer/process w/o additional taxation or duties if goods are exported in major seaport cities.
109
Describe the criticism of EPZs and its counterargument
Transnational corporations take advantage of workers. Wages are reasonable for region. Thousands have access to paid employment that otherwise X have gotten Low wages keep cost of manufactured items low -> low-income ppl can buy Many who are hired are women.
110
Postindustrial Economy
one that no longer employs large # of ppl in factories, instead has ppl who provide services/process information. (Wealthy core countries)
111
Assembly Line
Developed by Henry Ford, allows for items to move from worker to worker, with each repeatedly performing the same task -> more rapid production with less skilled workers. Fordism – this system of mass production
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Substitution principle
process where business maximize profit by substituting one factor of production for another.
113
Just-in-time delivery
inputs in the assembly process arrive at the assembly location when they are needed -> reduces expensive storage costs, but risks running short on inputs. Strong communication and transportation systems and ability to accurately predict production needs necessary
114
Locational interdepence
location decision for one factory is dependent upon the location of other related factories.
115
Technopole
hub for information-based industry and high-tech manufacturing. (same as agglomeration economies, but for tech companies). This clustering can allow for sharing of certain services and attracting highly skilled workers (Silicon Valley, etc)
116
Brownfields
Sites of abandoned factories
117
Corporate/business parks
Office buildings and other commercial spaces that congregate together to give more pleasant/efficient work environment
118
Sustainable development
address problems caused by depletion of natural resources, mass consumption of goods, air and water pollution, and impact of climate change.
119
Ecological footprint
Impact on the environment. People with more wealthy have larger ecological footprints. One measure is how much land is needed to provide one person w/ resources and to handle this person’s garbage (Person in US is 20 acres, world is 6.4 acres)
120
Resource depletion
When people overuse resources. Land lose fertility -> farmers become dependent on fertilizers Fossil fuels, forests, fish -> alternatives like solar/wind energy, tree and fish farms
121
Effects of pollution
Caused 16% deaths worldwide in 2015, 90% in low/middle income countries and most were children Strain economy by increasing healthcare costs, also ppl miss school/work bc they're sick or is taking care of someone who is. Worldwide cost estimated to be $4.6T/year, or 6% global output/year
122
Ecotourism
type of tourism that focuses on experiencing natural areas while minimizing the negative impact on the environment. Money spent by this provide incentives for people to protect the land. Sustainable development strategy.
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UN Millennium Development Goals (MDGs)
In 2000, identified the most challenging barriers to development and 8 key steps to overcome them. Helped countries w/ low levels of human development improve lives of citizens. Most successful anti-poverty program. Focus on periphery/semiperiphery
124
UN Sustainable Development Goals (SDGs)
new set of goals to replace the MDGs, 17 new goals. Intended to finish the job MDGs began, but with more awareness of environmental challenges and ways to overcome them. Gave countries 15 years to achieve. Targets all countries