Geog 216 Midterm 2 Flashcards
1
Q
what is demography
A
study of population characteristics important for considering future peoples needs
2
Q
what is the demographic equation
A
r = b-d + i-e
3
Q
what is the rate of natural increase
A
RNI = b-d
4
Q
what is doubling time
A
time required for a population to double in size (70 divided by RNI)
5
Q
what is the total fertility rate
A
average # of children a woman will have in child bearing years (15-44)
6
Q
what is the replacement fertility rate
A
of children needed to have to replace ourselves
global number is 2.1
7
Q
what is the infant mortality rate
A
of deaths that occur before age 1 for every 1000 live births, most progress in this
8
Q
what is life expectancy, and what is the global average
A
of years expected to live at birth, average = 72
9
Q
what were population drivers pre WW2 versus post WW2
A
pre ww2: increased food supply & basic living conditions/hygiene
post ww2: public health/medical advances & higher incomes
10
Q
what is the demographic transition model and name the stages
A
a model of how the size of a population changes as a countries economy develops
1. pre industrial
2. transitional
3. industrial
4. post industrial
11
Q
what is a population pyramid
A
population distribution by age & sex, can show increases, wars, famines, etc
12
Q
what are pro natal and anti natal policies with examples
A
to manage fertility rates
pro natal: encourage children e.g. good childcare
anti natal: discourage children e.g. birth control access
13
Q
decreasing population rates can be ___ or ___ (+ what is the slogan for anti natal)
A
coercive: one child policies
voluntary: educating women, birth control, etc
–> endogenous to devel process
“later, fewer, longer”
14
Q
where is the biggest population growth and when is the world supposed to reach a stationary population
and how many ppl are added to the world per minute
A
in the developing world (asia & africa) and by 2100
158 to world, 90 in devel countries
15
Q
does labor or capital move more freely
A
capital moves more freely than labor
16
Q
who created + define push & pull factors
A
ravenstein created laws of migration (push & pull)
push factor (involuntary): unemployment, persecution, environmental
pull factors (voluntary): better job/weather
17
Q
describe the wage differentials graph & what it means (and is it entirely true)
A
supply & demand curve meet at L or K
difference between L & K between countries is wage gap
migration leads to decrease in country A & increase in country B labor pools = convergence of wages w migration
–> more to do with industrialization
18
Q
how many migrants are there, how many are worker migrants and how many are refugees
A
272 million migrants, 164 million migrant workers, 26 million refugees
19
Q
is intl migration increasing? by what %? and what countries are primary senders / receivers
A
increasing from 2.5% 1995 to 3.5% 2019
senders: india, mexico, china
receivers: us, germany, saudi
20
Q
what does the ‘stock of migration’ mean
A
of ppl in a country who have at one point migrated
21
Q
what are the migration pathways and the % of migrants they contain
A
S to N: 40% –> most important
S to S: 33%
N to N: 22%
N to S: 5%
22
Q
what is a refugee, what are refugee sending/receiving countries, and what pathway do they mainly us
A
displaced person crossing international border –> conflict is biggest driver
sending: syria, afghan, south sudan, myanmar, congo
receiving: pakistan, turkey, north sudan, uganda, germany
– S to S pathway, 81%
23
Q
what are the drivers of north south migration REERS
A
R- return migration
E- economic opportunity
E- expansion of global companies
R- retirement migration
S- student migration
24
Q
what are the 5 economic consequences of intl migration
A
- employment: need migrants to fill key job areas
- taxes & revenue: migrants bring money to govt
- brain drain/gain: sending loses educated ppl (haiti) but gains ideas sent back home
- well being: improve financially but not socially
- remittances
25
how/ from-to who does remittances flow and how big are remittances
remittances- money sent back home by migrant workers
- 4x amount of organized devel assistance
senders: US, UAE, saudi, switzerland, germany
receivers: india, china, mexico, phillipines, egypt
26
what are internal migrants, and what are the push/pull factors for them
permanent movement within same country (just as many as intl)
push: climate change, internally displaced persons
pull: economic - rural to urban
27
what is the greatest migration in history
220 million internal immigrants in china from rural to urban --> living costs high so they are going back
28
what are natural resources
material basis of subsistence & development
- economic, social & cultural concept
robert zimmerman --> resources do not become, they are defined (socially constructed)
29
what was the case of wild rubber
indigenous used rubber from trees, new world curiosity --> settlers find rubber useful
1839 goodyear vulcanizes rubber, creates demand --> henry whickam took rubber seeds and made plantations in asia --> easily accessible, reserves in amazon exhausted now synthetic rubber exists
30
what is the resource scarcity/substitution cycle 7 steps
new resource --> demand rises --> easily accessible reserves exhausted --> resource scarcity --> rising prices --> r & d --> substitution created
31
what are non renewable resources
resources w fixed stock (cant be replaced in human life span)
appropriable (private good)
measured in reserves (3 ways)
e.g. coal
32
3 ways of measuring reserves
estimate: how much exists in the world in total
proven: how much is available to easily economically exploit
potential: how much is available to exploit if prices rise
--> gold example
33
what is a renewable resource
can be renewed
usually state or common property
grow or flow --> measured in flux of resource rate
e.g. wood
34
what is the rate of regeneration
how long it takes renewables to regenerate e.g. little trees to big
35
whats a sustained yield
using renewable resources at a rate that does not impair or damage ability to be fully renewed on a long term basis
36
are we running out of resources? --> population bomb
long standing concern since middle ages, different perspectives
population bomb (paul erhlich 1968) suggests rapid population growth will outstrip resource base
37
what is the club of rome
1972 think tank used computers to simulate population crisis, found we dont have limits to growth, but limits to sustainability
38
what happened during the oil crisis
1973 oil crisis when OPEC refused to export oil to western countries made people fear resource depletion & prices skyrocketed
39
who was thomus malthus and what did he believe
1798 wrote malthusian theory
--> population increased exponentially, while food arithmetically
--> not egalitarian, like darwin, we cant all have babies
--> 1970s, neo malthusians
40
whats karl marxs view on population
malthus is wrong, enough resources, but distribution & access is issue
--> innovation & tech change transcending resource limits
41
what is the carrying capacity and is it fixed
largest # of a population that the environment can support
--> we can change carrying capacity
42
what is the ultimate resource
human ingenuity!: tech and innovations can overcome malthus' issues
optimistic like marx
43
what was the simon-ehrlich bet
ehrlich bets prices of metal will be higher in the future, simon disagrees
--> simon wins bet price of metal decreases due to ingenuity
44
how are all three perspectives useful
malthus consider limits
marx considers access
ultimate resource considers importance of tech --> all use dynamic synergy
45
describe food as a resource
serves our physiological needs and cultural norms
use very narrow spectrum of plants from food world --> high reliance on few cereals
46
what is path dependency in food
dependence on crop you historically used
north america/europe = wheat
asia = rice
africa = root veggies
47
why is agriculture important for the global economy? - 5 reasons inele
international trade
national revenue
employment
livelihood
environment
48
why is agriculture important for international trade and who are the biggest exporters
1.7 trillion dollars from agriculture
8% of world merchandise trade
--> all global food exports r growing, biggest is fruit & vegs
exporters: US, Indonesia, Malaysia, Thailand, France, Brazil
49
what is canadas national revenue from agriculture
5% of GDP is from agriculture, some countries are more reliant (e.g. Rwanda, 50%)
50
how much of the worlds employees is employed in agriculture
1/3 of the worlds employees, second largest employment by sector
51
how does agriculture affect livlihood? reliant on for it for what, how much of canada relies on agriculture for livlihood
many rely on subsistence farming for food/fuel, but they also sell their agriculture
- only 1.9% of canadas pop is in agriculture, not very reliant
52
whats the environmental impact of agriculture
50% of water usage and 30% of greenhouse gases are from agriculture, also uses lots of land surface
53
what is subsistence farming
farmers reliant on their crops for basic needs with little surplus for market
low input, low productivity, low output
54
what is cash cropping
small households doing medium scale farming for personal consumption and the market
--> usually developing world, big producer of exports
55
what is industrial/commercial farming
large scale, mechanized farming destined for the market
high input, high productivity/output
big greenhouse gas impact
56
give an example of differences in farmer productivity
amazon: 700 kilos per hector, pray and sow method = low productivity
java: 5000 kilos per hector, highly managed and controlled patty system
57
what is the role of relative factor endowments
want to economize on scarcest factors of LLK
so canada in praries has land, capital, but less labor --> highly mechanized
peru has land, less capital and labor --> shifting cultivation
java has labor, medium capital, but low land --> terraces
58
what are the 2 innovations in agriculture and what are traits of innovation
1. intensification: increase inputs
2. biological: change crops (GMOs)
innovations are relative to factor endowments and endogenous (induced by response to specific issue)
59
what did esther boserup believe
as population grows agriculture intensifies --> population drives agriculture not other way around (anti malthus)
60
what are the 4 types of agriculture methods
1. shifting cultivation: crop land and abandon until its fertile again
2. bush fallow: leave regrowth for less time until u only have to cut down bush
3. short term fallow: not leaving forests or rotating fields for regrowth
4. permanent cultivation & multicropping: output per hector increases --> farm
61
what was the green revolution and who is norman borlaug
borlaug created green revolution in 1970s, change crops for productivity
- green rev package= high yielding crop variety, irrigation, fertilizer, pesticides
--> diffused globally, saved lives (india), but threatened rural farmers
--> now expanded to africa
62
what was the biotech revolution and where did it start
widespread application of bioengineering to increase food production & improve plant/animal strains
--> started 90s US, big GMO increase (st lawrence area)
63
whats the difference in agriculture growth vs population growth
2.4% increase in agriculture per year, more than 2.1% increase in population --> we are ok
--> increasing resources instead of land is issue now
64
which countries have increased in agriculture production
north east asia has surpassed north america/europe
south east asia & subsaharan africa have increased very little
russia has declined
65
what has happened to the price of food over time
price has fallen drastically since 1920s
price spiked in 1970s, and now increasing but still enough food for population --> so question what drives spikes and how we produce food
66
what is the relationship between energy consumption & GDP
strongly correlated
energy is input, when gdp rises input use rises so energy use rises
energy consumption steadily increasing since 1980s
67
what does a recession (lower gdp) mean for oil exploration and demand
oil demand and exploration increasing through 2000s but 2008 recession causes oil price to fall, and less rigs/exploration
68
who has the biggest energy consumption per capita & who are the biggest energy consumers and why
consumption per capita: iceland, canada, norway, us, sweden
energy consumers: iceland, trini, qatar, kuwait, uae, bahrain
--> all have extreme hot or cold climates
69
what are the inputs & outputs in the global energy system
585 EJs in 448 Ejs out --> 31% energy dissipates in global system
70
what are the largest and important imputs and outputs of the energy system
inputs: 1. oil, 2. coal, 3. natural gas
outputs: 1. industry, 2. transport, 3. residential
71
what era do we live in? how has energy use changed since ww2? what are pros and cons for largest inputs?
oil era, energy use skyrocketed
oil: high energy density, easy to transport
natural gas: popular, hard to transport
coal: most abundant, bulky, hard to transport, and pollutant
72
who are the biggest oil producers vs biggest exporters? do reserve locations matter for producers?
more oil reserves does not mean main producers
biggest producers: US, Saudi, Russia, Canada, China
biggest reserves: Saudi, Iran, Iraq, Kuwait, UAE
73
what are the 5 biggest oil pathways
1. saudi to china
2. saudi to southeast asia
3. canada to us
4. russia to germany
5. saudi to india
74
what is opec and how much oil do they produce and are they important?
12 oil producing countries wanting to control price of oil
30 million barrels a day, 40% of worlds oil, 80% of reserves
less important because of big producers outside opec like canada or norway
75
does oil have a lot of rent?
rent: space to make profit after cost of inputs
if oil barrel costs 5$ sells for 74$ 69 dollar rent is huge --> oil rich countries
76
what has oils price volatility been like
oils first discovered and is very expensive, price then drops over time, but tends to spike drastically
--> countries seek energy sovereignty because dependence on oil causes social conflict
77
what was the oil embargo
economic crisis of 1973 when opec refused to sell oil to western nations
78
what was the oil shock (iran contra)
iranian revolution 1979 led to spike in oil prices --> also happened during arab spring
79
what was the russia vs saudi arabia oil war
in 2020 saudi arabia and russia argued over oil prices and they both drove price down to compete --> price went negative
80
what are the chokepoints for oil
panama canal, strait of hormuz are neccesary for oil transport
81
when did oil production spike, and when will consumption peak
production spiked in 2010 and consumption will spike in 2030 --> looking for sustainable alternatives
82
what is the future for energy?
china will be a major player
coal importance levels off, oil will be more important
oil alternatives & resource alternatives will be important
83
what is non conventional oil & gas and what role does the US play
non conventional oil/gas uses fracking to dig into sandstone/shale for new reserves
US as the biggest producer, ran out of easily accessible reserves, and found this alternative (substitution cycle)
84
what energy investment by sector has risen and whats fallen?
oil investment fallen, natural gas falling
energy efficiency rising, low emissions rising, grids and storage rising
coal and electrification rising very slightly
85
what regions mainly use what energy source
china mainly coal & renewable, Eu mainly renewable & efficient, US & rest of the world mainly oil
86
is there hope for fusion
lots of hope for fusion, small projects look for working reactor, large experiments look for big advances
--> may be the future
87
what is the new world economy
recent 250 years since the industrial revolution
88
what was the context before 1800 (IR) vs after
before 1800: malthusian trap- long term cycles of growth in/around one --> not much growth, tension between population and tech devel
1800s onward: huge divergence industrial rev seperates LIC from HIC
--> year vs income per person = huge increase
89
what are the 5 key features of the industrial revolution
1. shift to large scale production (factories)
2. tech innovations revolutionize production (textiles)
3. devel of new products (railways, food processing)
4. penetration of new markets
5. institutional/organizational structures (banking, labor unions)
90
what are the 3 waves of the industrial revolution & when did the industrial revolution start
1760-ww1 = industrial rev
1st wave: britain (1760-1850)
2nd wave: continental europe (1850-mid1870s)
3rd wave: intermediate europe & n america (1870s-1914)
embryos (pockets of industrialization) start in UK
91
when were the 3 phases of industrial revolution in britains wave one
phase 1 1760-1790
phase 2 1790-1820
phase 3 1820-1850
92
why did the industrial rev start in britain
1. favorable political/legal climate: no monarchy, no way, 1707 scotland & england, govt focused on private profit
2. colonies: accumulate wealth, outlet for goods
3. favorable geo
4. tradition of industrial employment
5. conditions ripe for tech devel
93
what was the role of DoL in industrial rev
DoL: fragmentation of tasks in production process into different specialized functions
adam smith: pin making 18 steps 1776 looks to sources of labor productivity
increased large scale manufacturing --> DoL is key--> economies of scale, deskill workers, lower wages, control & discipline
94
what was the first wave in britains first phase all about with 4 examples
tech innovations: artisans experimenting in workshops
1. newcomen steam engine 1712
2. john kays flying shuttle 1733
3. hargraeves spinning jenny 1764
4. cartwrights power loom 1780
95
what were the embryos of phase 1 in britain?
north cornwall: south
south lancashire, east shropshire, southwesr yorkshire: spinning jennys
cydeside, tydeside: in the north
london: biggest city but not for manufacturing
96
what happened in phase 2, and what were follow through innovations?
consolidation of agglomeration processes: north/west britain industrial complex thickens growing pools of capital, commodities & labor (supporting industries & banking)
follow through innovations: cotton industry, iron making,= relocate industry
97
what happens in phase 3 and when is the apex of industrial rev in britain
expansion of railway system: broaden market outside of existing regions
--> 1851= apex of industrial rev in britain, competitve advanatge over european rivals --> great exhibition
98
what was the second wave and what held it back from happening
technological transfer from britain to continental europe --> depends on which regions adapt
before: IR held back by revolutionary wars & political fragmentation
99
what regions did the second wave effect most
1. sambre et meuse (belgium) strong banking sector
2. nord pas de calais (france) mining
3. ruhr rhine (germany) steel & coal
high correlation between coal mines & industrial activity
100
what happened during the third wave, how was expansion bolstered? --> (bolstered is a good thing)
spread to intermediat europe and north america
-- expansion bolstered by tech refinements eroding barriers for transport costs
--> tsc uneven in IR
101
what do regions across britain and europe have during the IR?
1. different tech traditions
2. different forms of industrial organization
3. signifigant institutional differences --> different convergence/divergence across regions
102
post fordism is also known as....
post industrialism, knowledge or info based economy, neoliberalism, advanced capitalism --> all synonyms
103
what are kondratiev waves and how long are they and how do prices fluctuate w growth/decline?
kondratiev tracked price data points in russia and europe in 19C and found cycles of growth & decline
long waves: 40 years 4 since IR started
in periods of economic growth, prices go up and in economic decline prices go down
104
what are industrial divides/ruptures
transition between waves
105
what are the 4 kondratiev waves since the start of the IR
IR --> 1815 (good feelings) --> hungry forties --> victorian boom --> 1865 (gilded age) --> depression of 1890s -->fordism
-->roaring 1920s --> great depression --> post fordism (swinging 60s) --> 1980 regan era --> 2000s
106
what is real business cycle theory
business cycles result from changes in tech and resource availability
short waves; 7-10 years
107
what is kuznets cycle
20-25 years short waves focused on economic booms
108
what is regulation theory and is it perfect
framework to describe & explain historical changes in 'macro structures' of capitalist economies
heuristic --> not perfect
109
where does rt emerge and what does it emphasize
emerges in france 1970s
emphasize historical devel & geography --> focuses on structures of capitalist world economy space
e.g. transition from rust to sun belt why happening and why there
110
what are the 2 lenses of RT glasses
called eyeglasses cuz it scans history to find commonalities
regime of accumulation & mode of social regulation
111
what is the regime of accumulation
macroeconomic regularity, a common and temporarily coherent way of distributing, producing, and exchanging commodities
- assumes different shapes at different times
- transition from one ROA to another (rupture) closely parralels tech devel
112
what are the 6 characterizations of the ROA
1. set of production techniques
2. key/leading edge industry sectors
3. organization of labor (unions)
4. competitions predominent form
5. distribution mechanisms of profit
6. specific spatial forms of expression (geo, clustering vs decentralization etc)
113
what is the mode of social regulation
socio political counterpart of ROA --> norms institutions conventions governing ROA
regulatory framework
114
2 key functions of MOSR
1. reflects reproduction of social relations
2. regularizes overall process of economic reproduction --> mosr is keel and roa is hull
115
when does fordism happen and what starts it
1920s-1970s, starts when henry ford reorganizes auto industry in 1913 highland park MI assembly line
116
what is taylorism and what are its 2 goals
scientific management devel by f taylor (mech engineer obsessed w efficiency)
1. seperate management & production jobs
2. further seperate production jobs into production lines --> fragmented, highly controlled, deskilled, standardized DoL
117
what is the river rouge complex?
vertically integrated production factory in dearborn MI --> all aspects of production under one roof, biggest at the time
- 90 buildings from 1917-1928, car factory
118
what are the changes in fordism from 1920-70 --> consumer uniformity
taylorism facilitates mass production & realization of economies of scale
ford realizes mass production = mass consumption
--> use consumer uniformity to create signifigant market base
119
what is the 5$ per day program
ford pays workers 5$ per day, more than competition good for 2 reasons
1. lots of turnover on prod lines, workers accept monotonous jobs for higher pay
2. increased worker salary = more purchasing mass produced goods
120
what are the 6 developments enabling fordisms golden era from 1945-69 (all ROA)
1. rise of keynesian economic planning
2. suburbanization
3. maturing mass production techniques
4. key industries: cars, heavy equipment, steel, petro, biotech, electrical appliances, highways and airways
5. R & D in key sectors
6. competition: oglipolistic & domestic
121
what is the keynesian welfare state and how is it important for fordism MOSR
capital & labor negotiations --> through state for predictable compromise
capital & labor work together to float fordist mass production through state intervention
social contract/mass economic democracy --> benefits white men
122
what are keynesian economics
theory based on john maynard keynes stating govt spending should increase during business slumps and decrease during booms
123
what is the regional geography of fordism
us mass production concentration in the rust belt
124
what is intl geo of fordism and the marshall plan
fordism needs mass expansion of world trade & intl investment
marshall plan: us heavily invests in rebuilding europe post ww2
125
what are the 2 things expanding world trade during fordism allows for
1. us commodities to be consumed overseas
2. new globalized sources of raw materials
126
what is the bretton woods agreement and what does it do
mosr needs to be intl because keynesian economics plays role in intl rules
bretton woods: compact for intl economic rules in 1944 (harry white uk & keynes us)
1. us $ = worlds reserve currency backed by gold
2. fixed exchange rates between currencies
3. regulated flows of capital across border --> world bank, imf, gatt
127
how does gdp grow making fordism golden age of capitalism
world gdp grows 4-6% during fordism, after fordism slows down, now grows 2-4% per year (recessions it goes negative)
128
what is stagflation
a domestic root of crisis for fordism, when theres rising inflation and stagnating output
129
what were the late 1960s and early 1970s characterized by (4)
1. rigid mass production: assume stable consumer markets
2. strikes and labor distributions: increased production cost
3. pressure on KWS entitlement programs
4. monetary inflation
130
what are the 2 intl roots of crisis for fordism
1. abbrogation of bretton woods agreement (1971) too many us $ circulating out of us, bank runs out of gold
2. 1973 oil crisis forces tech and org changes (japan cars instead of us)
131
what are the ten post fordism characteristics
1. decrease core manufacturing
2. growth of peripheral fordism
3. more telecom tech for global prod
4. economies of scale to scope
5. surge in services --> FIRE
6. more high knowledge/tech jobs
7. key industries: telecom, biotech, medical, cultural, semiconductors
8. highly competitive conditions
9. flexibilization of jobs
10. just in case to just in time
132
whats the difference between just in time and just in case production
just in case: stockpile inventory in warehouses
just in time: lean production systems, coordinate/rely on suppliers for parts only when needed
(started in japan)
133
what are 3 consequences of the post fordist ROA
1. just in time changes production process: focus on team efficiency instead of assembly line speed
2. switch to vertical disintegration of firms
3. geography changes to centralization (clustering) of firms --> sillicon valley, and decentralization (stretching) of production process & industrial activity due to globalization
134
what are the 3 consequences of the post fordist MOSR
1. switch from KWS subsidy state to entrprenurial workfare state
2. state deregulate business --> collective bargaining through unions is replaced by individuals
3. shift in societal values from mass cosumption to yuppie individidual cultures
135
what are the 3 negative consequences of post fordism
1. increased labor market uncertainty
2. increased social polarization/inequality
3. increased competition between individuals and between regions
136
who was hayek and what did he believe
austrian economist from 1970s, believes in free market capitalism --> anti keynes
137
who was milton friedman and what was his economic school
from chicago school of economics --> believed in free markets and that market forces should be primary driver of economic growth and the govt should ahve minimal intervention
138
who was kieth joseph and what did he believe
he was a conservative uk economist in late 60s who supported hayeks free market and influenced margaret thatcher
139
who are some politicians that impacted the switch to post fordism
thatcher: british pm who implemented free market policies and pulled away from subsidy state --> winter of discontentment (1979) but saves economy
jimmy carter: high point of keynesian behavior (it wasnt working)
ronald regan: shares thatchers beliefs, elected as president 1980, hard to implement
140
what shifts occured in the world space economy during the rupture from fordism to post fordism and how does that effect new industrial spaces
the rupture --> windows of locational opportunity, firms no longer held to manufacturing sites, seek out new locations to escape rigidity
led to new industrial spaced (e.g. sun belt)
141
what are 5 things firms are looking for in the new post fordist era
1. pro business environment
2. lack of unions
3. favorable tax policies
4. cheap land/rents
5. university linkages
142
what are 2 geographical forces at work during the post fordist point of departure
1. decentralization: dispersion to suitable places (globalization, vertical disintegration)
2. centralization: clustering/agglomeration of firms
143
define the division of labor and define a 'moment' within it
seperation of tasks within the labor/production process and the allocation of these tasks to different workers
--. fragment tasks, specialize production functions
--> moment = one specific task in DoL with transaction leading to it
144
what is the basic input output DoL model and what are the types of linkages
input: initial steps in production
output: final good produced
hockey stick DoL is example of input-output DoL
upstream linkages: steps closest to raw materials
downstream linkages: steps closest to finished product
145
what is vertical integration/disintegration and what does it effect
vertical integration: one firm carries out all moments in DoL
vertical disintegration: multiple specialized firms carry out different tasks
-affects the geography of DoL (where moment occur)
146
what is roundaboutness and what does increasing it lead to
the # of interconnected steps between the production of raw materials on which the economy is based, and the production of final outputs
--> increased roundaboutness means more complex DoL, more steps, more linkages, more transactions, and more geo differentiation
147
what is the technical DoL
within a firm, production processes are broken down into specialized tasks and theres a vertical heirarchy of transaction processes internal to the firm
148
what is the social DoL
between firms, parceling out different tasks between independent firms in patterns of vertical disintegration
--> specialized producers buy and sell through externalized transactions governed by market forces
149
what is average cost and how does it change with output
total cost divided by # of goods produced (output)
high cost w little output, drops until reach minimum efficient scale, then rises again with even more output
150
what are total costs, variable costs, fixed costs, and sunk costs
total costs = variable costs + fixed costs
variable costs = costs that change based on output e.g. labor, more inputs
fixed costs = costs that exist regardless of output level e.g. warehouse, electricity, utility
sunk costs = costs already put in and cant be recovered
151
what are economies of scale versus dieconomies of scale
economies of scale: reducing costs by increasing ouput, advantages of higher output
diseconomies of scale: average costs increase again when output is increased past minimum efficient scale (level of output w lowest possible costs)
152
should you vertically integrate or disintegrate? use the basic formula
VDI system: AC = f(x) & AC = g(y)
VI system: AC = h(x,y)
if f(x) + g(y) > h(x,y) then integration is cheaper
if f(x) + g(y) < h(x,y) then disintegration is cheaper
153
what are economies of scale and what are the differences between internal and external ones
economies of scale are produced by quantitative increase in output levels to decrease average costs
internal: function of production is within firm
external: function of individual producers sharing costs (producers in similar industry, e.g. technopark montreal)
154
what are economies of scope and what are the differences between internal and external ones
economies of scope are based on the level of productivity variety (i.e. qualitative) with cost advantages from producing 2 or more activities together
e.g. dairy farm makes milk, yoghurt, cheese
internal: different tasks under one roof
external: range of different producers in given industrial complex
155
what was the switch in type of economy from fordism to post fordism
fordism = economies of scale
post fordism = switch to economies of scope
156
in scenario one looking at economies of scope, is it more cost efficient to have a disintegrated system or integrated and is that an internal or external economy of scope
because the integrated system has a lower minimum than the disintegrated system, a internal economy of scope is more cost efficient --> so have both moments produced in same factory setting
157
in scenario two looking at diseconomies of scope, is it more cost effective to have a DI or I system and is this system internal/external
when disintegrated system has lower minimum than integrated, external economies of scope are cheaper, --> so have both moments produced at different factory settings
158
in scenario three, by adding transaction costs to the vertically disintegrated firm average costs, what type of economy of scope is now more efficient
now the minimum is lower for the vertically integrated firm than the vertically disintegrated firm considering transport costs
159
what does geography matter for?
transport costs --> why firms want to locate close to each other if vertically disintegrated so transport costs dont make vertical integration better option
160
why would you integrate production functions (generally speaking & 3 specifics)
general: stability & predictability --> strong synergetic interaction
1. managerial efficiency
2. infastructure savings (oil refinery) & moral hazards (secrets leaking)
3. technological interdependencies (feedback loops)
161
whats a moral hazard w example
related to info assymetry and who takes on risk (intel, TSMC are chip manufacturors that dont want to leak secrets)
162
why would you disintegrate production function (general and 3 reasons)
general: more flexibility and ability to adapt to changing markets
1.negative overspills (noise from printing)
2. possible labor relation problems (UK auto industry parking disputes --> offroad HQ & management
3. uncertainty in final markets --> look for greater flexibility (actor jean example)
163
what are the 3 components of uncertainty in final markets
1. instability in final demand
2. intense competition
3. product differentiation
164
what is the tension characteristic of post fordist economies
vertical integration vs disintegration
165
why is there a formation of industrial complexes with example
because there is a positive relationship between disintegration and proliferation (increase) of externalized transaction activities
e.g. t shirt industry (adam smith shows extent of DoL is limited by demand of market)
166
why would you want to reduce transaction costs in input-output system (t shirt example)
so capital investments go through transactions as quickly as possible
167
what are industrial complexes
large assemblages of specialized & flexible producers interconnected via an external web of transactions
--> cluster firms in related industry = more roundaboutness
168
what is marshalls industrial district and its 3 forces of agglomeration
alfred marshall: focused on 1890-1920 jewlery cluster in UK
1. increase efficiency of linkages
2. create labor pools (job matching/seeking)
3. industrial atmosphere (smth in the air)
--> flows of knowlegde/knowledge spillovers
169
what are the 5 factors encouraging the 3 forces
1. bolstered by institutional infrastructure
2. cumulative process - feedback loops
3. developmental trajectories - path dependency
4. agglomeration reinforces competition
5. industrial complexes not isolated (mosaic of regional/global complex connection)
170
what are the characteristics of the nature of transactions --> main and 3 more
main: positive relationship between distance & cost
1. physical content variability (size, weight)
2. temporal/spatial variability (routine shipping vs special order)
3. neccesity for face-to-face contact (industrial atmosphere)
171
examples of key industrial clusters
US: silicon valley, NYC, LA, etc
Montreal: 3 main aerospace clusters
major industrial complexes: different districts e.g. clothing district, within cities
172
what is the schematic representation of industrial complexes
agglomeration clusters are not isolated from other agglomerations
post fordist key spatial characteristic: industrial complexes, but sitll connected over global space economy
173
industrial complexes characterized by small firms vs large firms
small firms: deep DoL, complex transactions, face to face contact --> agglomeration
large firms: shallow DoL, standardized/predictable transactions, less face to face --> spatial dispersion
174
what are physical transactions (aka traded interdependencies)
$ transactions (all that weve discussed above)
175
what are untraded interdependencies
trading hard to quantify, knowledge spillovers (3rd force of agglomeration)
176
what are techno optimists and who do they relate to
believe scarcity exists, but market signals will alert people abt the scarcity and the substitution cycle will kick in with and human ingeuinity (related to ultimate resource) solves issue
