Download - Economic Activity And The Environment
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Economic Activity and the Economic Activity and the EnvironmentEnvironment
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ExternalitiesExternalities• What are externalities?
• What are the associated costs?
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ExternalitiesExternalities
• defined as third party (or spill-over) effects arising from the production and/or consumption of goods and services for which no appropriate compensation is paid.
• Externalities can cause market failure if the price mechanism does not take into account the full social costs and social benefits of production and consumption.
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Social costs?Social costs?
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Social costsSocial costs
• includes all the costs of production of the output of a particular good or service. We include the third party (external) costs arising, for example, from pollution of the atmosphere.
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Private CostsPrivate Costs
• What are Private costs?
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Private CostsPrivate Costs
• A cost incurred in the production process by the producer; including tax and profit margins that are anticipated
• Externalities create a divergence between the private and social costs of production.
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SOCIAL COST = PRIVATE COST SOCIAL COST = PRIVATE COST + EXTERNALITY+ EXTERNALITY
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What is Cost Benefit What is Cost Benefit Analysis?Analysis?
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Cost benefit analysis finds all the Cost benefit analysis finds all the positive factors known as ‘positive factors known as ‘benefits’benefits’ . .
And subtracts all the negatives, And subtracts all the negatives, ‘‘costs’costs’. The difference indicates . The difference indicates whether the planned action is whether the planned action is
advisable. advisable.
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In PairsIn Pairs
• Come up with an example where social costs outweigh private costs
• Where Private costs outweigh social costs
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Race and The EnvironmentRace and The Environment
• The Center for Policy Alternatives (CPA) in the USA released a study in 1987;Toxic Wastes and Race Revisited which revealed that commercial toxic waste facilities are even more likely to be located in minority communities than ever before
• It found that people of colour are nearly 50 percent more likely to live near a commercial toxic waste facility than whites
• And three times more likely to live in communities with multiple toxic waste facilities.
• from 1980 to 1993, the concentration of minorities in zip code areas with commercial toxic waste facilities grew from 25 to 31 percent
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• Environmental racism, which suggests a higher level of exposure to environmental hazards for racial minorities and the poor than to non-minorities and those more economically advantaged,
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According to the journal ‘Environment’ (May ‘94) The argument that unequal environmental protection undermined 3 basic equalities.
• Procedural Equality• Geographical Equality• Social Equality Ironically finding that some Government actions
have increased the problems due to stringent regulations and least line of resistance
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So what do we know?So what do we know?
• Externalities are costs to a third party• Social costs are all cost plus externalities• Private costs are the costs incurred by the producers• Cost benefit analysis is a method of working out the
costs in terms of benefits and loses.• Race and the environment is a major issue• Inequality exists within this.
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The Service SectorThe Service Sector
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• By far the most dominant sector in MEDC’s
• Is of considerable significance in Developing countries
• Clark Fisher model shows this.
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Osaka – JapanOsaka – Japan
• Dubbed the second city of Japan
• Osaka is historically the commercial capital of Japan
• It’s the heart of Japan's second largest, and the world's ninth largest metropolitan area
• Population of 19,220,000.
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Composition of IndustryComposition of Industry
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Classification of Service Classification of Service IndustriesIndustries
• Service industries vary hugely from
• Most importantly between producers and consumers
• In pairs try to classify service industries into groups
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Variety Of Service IndustriesVariety Of Service Industries
Has changed due to:
• Adaptation of new technologies
• Increase in disposable income
• Greater leisure time• Demographic changes• New social values
Service provision and location
• Distribution and density of population
• Variations in purchasing power
• Availability of Labour• Proximity to other
services• Demographic factors
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RetailingRetailing
• What is retailing???
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RetailingRetailing
• Consists of those business activities involved in the sale of goods and services to consumers for their personal, family or household use.
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RetailingRetailing
• In Pairs try and think what kind of changes retailing has gone through and how it has changed the organisation and make up of retail industry.
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Recent TrendsRecent Trends
• Number of independent traders has fallen
• Big retailers have gone transnational
• Teleshopping
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Growth of RetailingGrowth of Retailing
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Problems with SuperstoresProblems with Superstores
• Taking customers away from rural shops
• Often build on Greenfield sites
• Huge parking areas and generate lots of traffic
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Finally...Finally...
• Try to find out more about the classification of industries
• Explain the attraction of London for financial institutions
• What are the reasons for the decentralisation of back office functions.
• Why has service provision declined within rural areas.
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Further ReadingFurther Reading
• Guinness and Nagle Chapter 4• http://tutor2u.net/economics/content/topics/externalit
ies/what_are_externalities.htm• Geography an Integrated Approach Chapters 19 &
20• http://www.ft.com/cms/s/0/c729f3f6-d65b-11dc-b9f4
-0000779fd2ac.html?nclick_check=1• Moodle