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Econ Geog Exam 1
| Question | Answer |
|---|---|
| Discrete areas | Discrete places are divided into distinct areas to make it easier to see data. These are separated by what they experience like a place having no electricity even in one county, these help recognize a pattern and are separated by language, politics etc... |
| Formal Regions - homogenous space | Internally homogeneous (things in common to make it different from another place). Separated by politics, climate, landforms, language etc... |
| Functional regions – defined by spatial interactions. | Based on spatial interactions not politics or climate etc... Based on things like journey to work, if a good amount of people commute somewhere like Pittsburgh for work which means you are part of the Pittsburgh region |
| Clustered spatial patterns. | Things like the steel industry build around a certain area for a specific reason. |
| dispersed spatial patterns. | Dispersed like grocery stores to create competition but not too close as to over-serve an area. |
| random spatial patterns. | There is no reason of why they are where they are, usually there is but it would take a lot to explain. |
| Metropolitan Statistical Areas – urban region in US. | |
| Site | characteristics of specific location where a business is in a city, Is it flat, hilly what's the climate, what's rent, does it have a parking lot or not? etc... |
| Situation | location with respect to surroundings. New Orleans is below sea level but a good situation is its position near mouth of the Mississippi River. Is it situated well with transportation systems (highways, etc...), are there many people around it? |
| Friction of distance | decline over time, mitigates “tyranny of space” |
| Types of transportation cost: terminal cost (fixed cost), line haul cost (variable cost). | |
| Uniform Rate Structure | ("postage stamps") favors those far away, used to expand markets, or are public policy, low administration costs since rates are all the same. |
| Tapering Rate Structure | Line haul costs which are not always linear. |
| Stepped curves Rate Structure | pricing model where the rate of pay—such as commissions, bonuses, or fees—increases sharply when specific performance thresholds or volume tiers are reached |
| Rate Zone structure | Uniform delivery and tapered combination. everyone in a zone will be charged a certain rate. Ex: public transit (how many stops and how many zones you passed will determine the cost you are charged.) |
| Basing point | Base a price like everything came from a certain place, anti competitive strategy. Ex: Pittsburgh did this to foght other cities in the early steel 1900's, this was stopped bc it was considered anti competitive so it was stopped. |
| Cost advantage of modes based on distance | truck (short distance), rail (medium), water (long). Different terminal costs and scale economics |
| Inter-modal shipments and principle of refraction. | Using more than 1 form of transportation in shipment |
| Malcolm McLean and containerization | He designed a unit of transportation that is standardized around the world and connected to trucks after being stacked on a boat and would not need to be unloaded slowly. This made a huge boom in the lowering of shipping costs and time to ship things. |
| Maritime | most global shipments, choke points (e.g., Panama Canal, Suez Canal, Malacca Max) |
| Historical lowering of transportation cost | Erie Canal, new technologies, lead to spatial price convergence and time-space compression. |
| Just in time production | Fine tuned deliveries needed for certain businesses to avoid having huge warehouses for storage. (specifically the auto-industry utilizes this a lot). |
| Goods shipped by air | time sensitive rapid paced industry products like fashion products, high value goods like computer chips, perishable goods like food, and tourists. |
| Types of transport networks: least cost to build, least cost to use, hub and spoke (airlines) | Ships are cheaper over distance but slow and terminal cost, trains are cheaper over distance but slow and terminal costs, trucks are expensive but fast. |
| Communication | cost down, fiber optics and satellites, lower search costs for clients or better deal on parts, information economy, no friction of distance with internet but still more and longer physical shipments, personal travel and face-to-face meetings. |
| Economy of scale | As the output increases, the cost per unit of production falls, can be both internal and external. |
| Internal Economy of Scale | bulk purchasing/sales/shipping, managerial economies, indivisibility, product development. How a company organizes all of this. |
| Knowledge economy | high return to scale. Size of markets and transportation limit economy of scale |
| Economies of scale in shipping. TEU >10,000. Size of ports and trade volumes. | Shipping containers were standardized and measures a shipping ship based on how many standardized 20 foot equivalent (TEU) containers could fit on it. It became easier to scale up shipping bc it was efficient and switched modes of transport easily. |
| Diseconomies of scale | When the cost curve bottoms out, optimal size been achieved. Beyond this point the cost curve rises and "diseconomies of scale" grows. Basically you get diminishing return for growing any bigger. |
| Division of labor | division of a complex process into a number of simpler tasks, each undertaken by a different individual. Adam Smith and the pin maker example, emergence of factory system. Technical and allocational efficiency. |
| External economies of scale = agglomeration economies (clustering of activities) | Cluster of different forms of economic activities that benefit from being clustered together. A city is the ultimate form of this bc a lot of people means a large cluster of economic activity. |
| Urbanization economies (unrelated firms cluster) | unrelated firms located near each other use common resources (work force, highways, generic business services), beneficial to new firms, diseconomies set in when cities become large, mid-size cities find success in this. |
| Juxtaposition economies (firms in related industries cluster) | One company buys parts from another company, like buying bolts from a company to use in their own production. Input output relationship between companies. |
| Localization economies (firms in same industry cluster) | advanced industries, often hi tech, use specialized resources, often in creative cities with the creative class. Thrives on face-to-face and buzz. They rely on same very specialized labor force. Ex: firms starting near tech schools. |
| Natural advantage clustering | Natural resources like forests minerals, oil and gas, so industries cluster around this to use it. |
| Supply | How willing or able is a producer to make or supply something at a given price. Positive relationship so upward sloping. If price increases then the quantity supplied is greater. |
| Elasticity – “steep” vs “flat” curves, necessities or luxury items | The extent to which demand changes with price. |
| Market equilibrium. | The stable state where the quantity of a product that buyers want (demand) exactly matches the quantity sellers offer (supply), creating a market-clearing price with no surpluses or shortages. |
| Monopoly | only one supplier. Want highest revenue so lower the price so a lot of people still buy to generate highest total amount of money. Typically have higher price and lower supply for economy than supply and demand. |
| Oligopoly | few suppliers. |
| Spatial examples | spatial demand cone, supply funnel price, price variations across space, spatial monopolies (NYC garbage and the mafia). |
| Spatial interaction examples | commuting, shopping, tourism, trade, migration, communication. |
| The gravity model | equation based on Newton’s law of gravity, based on size of objects (population, total GDP) and distance. |
| Distance decay function | Compares predicted values and actual values (closer or weaker interaction than expected). Used to predict trade, migration, commuting and infrastructure investment. |
| Reilly’s Law of Retail Gravitation | calculates market areas, find best location for business, if one city is larger than another then that city will have more draw EX: city one pop= 4,000 while city 2= 16,000, they are 12 miles apart but city 2's market area = 8 miles out, city 1 = 4. |
| Output: waste | deposition, “sinks” |
| Value of resources | as factors of production, for quality of life, rights of nature |
| Policy | optimize economic yield, provide good quality of life, preservation of nature |
| Consumption based on population. | RNI=BR-DR. Consumption based on economic development level |
| Malthus model | food vs population growth |
| Scarcity and solutions to it | Lower supply changes equilibrium point and the price oncreases, the quantity consumed is lowered as well. Solutions: regulation or privatization. Applications today – roads, air pollution and climate change |
| Tragedy of the commons. | A resource is owned by society collectively. EX: farm village shares grazing meadow and overgraze this land bc of rival and non excludable use, no individual has a reason to hold back bc it profits them individually but it impacts everyone as a whole bad |
| Factors not included in price | leads to consumers underpaying and overconsuming goods. Solution example: carbon tax, congestion charges Externalities localized. Concentration vs decentralization. Environmental justice issue. Value of a statistical life. |
| Externalities | When consuming or producing a good a third party is affected. Ex: walking to work causes less congestion, or airtravel causes an increase in pollution. |
| Sustainable development and inter-generational equity, future uncertainties | Consequences of consumption of resources and resulting pollution over time. Not overusing resources so they are available for the future, do not over-degrade the Environment. |
| Continuous space | Values form a continuous range with an absolute reference ( range of values) form a continuous gradient in geographic space (spatial gradient). |
| Break-of-bulk (or transshipment) points. | When everything goes to one point then ships out from there. Ex: raw material is all shipped to one factory then shipped out as a finished product in multiple routes. |
| External economy of scale | Why a company would build in a certain city etc.. |
| Managerial efficiency | Managers with specialized knowledge are more economically efficient than someone that has many duties as a manager. |
| Indivisibility of capital investment | Ex: you have a machine running at 100% so you buy another but there isnt enough demand to run both at 100% so the second goes to 50%, bc of this you start to produce more which increases your econ of scale and now both run at 100%. |
| Low increasing returns to scale | Businesses like apparel, footwear, textiles and wood products do not benefit from increasing there scale a lot. |
| High increasing return to scale | Industry, motor vehicles, chemical utilities and aircraft production all benefit from increasing production by a lot. |
| Buzz | informal word of mouth, new ideas from the cluster of specialized trade gets around. |
| Elastic demand | Big chaneg in demand, things like luxury items (things we dont need) flat curve. |
| Inelastic demand | Means a steep curve, common for necessities. little change in demand |
| intervening opportunity (lessens attraction between more distant places). | The existence of a closer destination that lessens the attractiveness of more distant places. EX: a new mexican restaurant opens up closer to where peopel live so the other farther place isnt the only option anymore. |
| Transferability | The ease of movements, indicators of this are travel cost, shipping cost, capacity to communicate, if there are trade barriers (tarifs), regulatory obstacles (limiting communication or "protecting consumers") |
| 3 kinds of natural resources | material, food, energy |
| private cost | what an individual pays for a product without negative externalities |
| Social cost | Cost we pay as a whole taking in negative externalities like pollution. |
Created by:
JackPitt