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How Economies are Organized

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GEOG 216
Geraldine Akman

How Economies are Organized - How decisions are made in terms of production + consumption - Who is it that decides what will be produced, how distrib, where, why? Types of economic sectors - Primary: ex, fishing, forestry, mining, agriculture - Secondary: ex, process, transform, fabricate, or assemble raw materials to s/other product - Tertiary: sale + exchange of g/s, (ex, retail, professional, education, health) - In indus soc, most workers earn $ in this sector - Quaternary: handling + processing of knowledge + information (ex, R & D) Patterns of production - Formal sector - Recog by the state (subject to law, regulation, taxation)  Taxes (gov revenues) can be used for public services + can contrib to econ growth - Small businesses to MNCs - Informal sector - S/ppl can at least get s/cash - By-pass state + gov doesn’t have revenue to establish infrastructure - Tend to be small +/fam operated - Subsistence farmers to urban sellers - Dualism - Tend to use term to describe poor nats - Exists when extremes of wealth + poverty live side by side in an econ  Ex: foreign/domestic elites alongside mass of poorer ppl - Public goods - G/s provide communally  Ex: national defense, roads, parks, education, health care Tasks of an economic society - Organize production of enough g/s to assure its survival - Arrange distrib of production so more production can take place - Answer: what, how, where, to whom (benefits), by whom (decides)? Modes of production and distribution - Systems w/distinct relationships among factors of production (ex: land, labour, capital) - Land: natural resources / Labour: workforce, un/skilled / Capital: machinery, investment (Capitalist) free-market economy - Location of decision-making - Decentralized producer + consumer sovereignty - Ownership + control of means of production - Individ entrepreneurs (private enterprises) control productive processes + market the surplus - S/times states involved in providing transportation + control certain industries to make sure products are provided to population (theoretically all controlled by entrepreneurs) - Private property rights - Allocative mechanism - Price mechanism used for consumer goods, land, labour, capital - Price is based on interaction b/w consumers + producers in the market (equilibrium) - Employees sell labour to earn $ to purchase necess g/s - Pattern of industry - Competition w/freedom of entry + exit - Free market reigned by most efficient producer - Spatial organisation - Spatially extensive trade (throughout nat, across borders…) - Examples: Canada, USA, nats of WEur Command economy - If d
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