GEO 101 LECTURE SEGMENT 4

LECTURE 12      

Trade 

Maximum content of this chapter is important for quiz and final

( VERY IMPORTANT)Trade is an economic activity in the tertiary sectors, by which Homo sapiens are involved in the exchange of goods and services between two or between more than two parties involving monetary or non-monetary transactions.

Trading can occur in two ways-

v                       Informal trade

v                       Formal trade

Informal trade ( VERY IMPORTANT)

Informal trade is also known as Barter trade. People at first started trade with this. In this trade two parties are involved in non-monetary transaction.

Formal trade ( VERY IMPORTANT)

Formal trade means exchanging of goods and services between two or more than two parties involving monetary transactions. Formal trade occur in two ways

q       Internal trade

q       International trade

Internal trade

Internal trade means involved in monetary transactions in the local currency and the trade is conducted within geographical boundaries of a given country.

International trade

International trade indicates exchange of goods and services involving monetary transactions in the hard currency and the trade entails crossing the international border.

There are two components of international trade

q       Export

q       Import

Export

Sending of demanded commodities to parties that are located in foreign countries.

Import

Receiving of a given demanded commodities from the parties that are located in foreign countries.

Balance of trade

Balance of trade is the subtraction of import trade from export trade. It could be either positive or negative. A country earn when the balance of trade is positive and the net return is also positive. The country losses when the balance of trade is negative.

LECTURE  13

Transportation

Transportation is an economic activity where we transport goods as well as passengers from one place to another in a certain distance.

Modes of transportation

1.Surface transportation

ü     Surface transportation

§        Land

·        Road

·        Railway

§        Water

·        River (inland water transportation)

·        Marine

ü     Air transportation

Road transport ( VERY IMPORTANT)

v    Operates on small margins-operating cost high

v    Wide area coverage

v    Flexible and convenient

v    Inadequate capacity for moving heavy volumes

v    High costs of long hauls

Railway transport ( VERY IMPORTANT)

v    Capital intensive- large initial investment

v    Profit depend on intensity and use

v    High terminal cost

v    Increasing effectiveness with length of haul

v    Large shipments cheaper by long or short haul

v    Minerals, unprocessed products, building materials, chemicals are transported

v    Large volumes of bulk goods

Water transport ( VERY IMPORTANT)

v    Low investment, especially where natural waterways utilized

v    Increasing effectiveness with length of haul

v    Marine: semi finished and finished products are transported

v    Inland: bulk raw goods- coal, oil, gravel, cement, brick etc. are transported.

Air transportation ( VERY IMPORTANT)

v    Most expensive mode of transportation

v    Mainly transport people from one place to another.

Transportation service ( VERY IMPORTANT)

q       Inter regional transportation

q       Intra regional transportation

Transportation service ( VERY IMPORTANT)

Ø     Inter regional transportation

Ø     Intra regional transportation

This is the transportation service within different cities. The nodes (urban centers) are connected by different modes of transportation.

Intra regional transportation is a transportation network, which is happening within the region. It is very urban specific for developed countries. People are important in intra-regional transportation because people have to communicate between home and workplace.

  LECTURE 14
A NOTE WILL BE GIVEN ON THIS TOPIC SO BE WITH THIS BLOG

Connectivity of Transport Network

Any network has three elements

Ø     The nodes

Ø     The routes or edges

Ø     Independent or unconnected part of the network

A useful first step in the analysis of network is to construct a connectivity matrix. This shows which nodes have direct links with each other and which do not have direct links. If each node are connected directly to every other node then all cell in table would contain the symbol 1. Thus the more frequently the symbol 1 appears in the matrix, the network is more interconnected.

The final measure of network characteristics to be discussed here is the b index. This provides an alternative way of describing the complexity of the network.

b index =e/v

e = number of edges/routs

v = number of nodes or vertex/vertices

An index 1 describes a network with just one circuit and the figure increases, as the structure of the network grows more complex, with an increasing number of edges in relation to vertices or nodes.

The location of transportation route & network

Transportation route do not exist in isolation. They are organized into networks with varying degrees of interaction. Interaction occurs between places if they have some kind of demand-supply relationship. If two urban centers are complementary but not connected by a transportation route will be constructed to meet need.

The cost of transportation consists of two basic elements.

Ø     Fixed/ capital costs: these are the cost involved in actually building the route.

§        Uneven ground may have to be leveled.

§        Water logged ground drained and filled.

Ø     Variable /operating costs: are recurrent costs, which vary according to both the length of route and the volume of traffic flowing along it. Routes have to be maintained and kept in good repairs.

These two cost elements may vary from place to place in terms of their relative importance. In some cases fixed cost may be extremely high and operating cost relatively low.

To some extent we can view the route problem as one involving two extreme sets of goals.

q       Least cost to build: to build the route or networks as cheaply as possible result in a network as low as possible.

q       Least cost to users: to build the route or network with the aim of keeping the costs to the users as low as possible- result in highly connected route.

LECTURE 15

Cities as Service center

City

A city is a settlement with a large concentration of people with a distinctive organization, life-styles and livelihood. Specialized land uses and a variety of social, economic and political institutions allocate, coordinate and manage the resources found in the city. Cities are the center of power and control in our society.

Cities as a service center/function of a city

A principal function of the city is to provide services for its citizens and the surrounding hinterland (land behind the city/ service center from where it get supports).

These activities embrace a variety of services and management function like

v   Retailing

v   Banking

v   Wholesaling

v   Regional and national headquarters                                                      office activity

v   Government services

v   Various others personal and professional services

Hierarchical arrangement of the cities ( VERY IMPORTANT)

We can explain the hierarchical arrangement of the cities by using the theory of ‘Rank-Size Rule’.

One can predict the size of a given city by knowing its rank and the size of the largest city according to the following relationship

P_{n =} P₁ x 1/Rⁿ

P_n = population size of city being studied

P₁ = population size of largest city

Rⁿ = rank of city being studied

In this example the second largest city in a country should be one-half size of the largest city.

Composite centrality score

Measure of importance of a center in terms of population, function and other services.

Threshold population

Minimum requirement of population to sustain any service.

Trade area

Trade area is a sphere of influence over the area from which a service center draws its customers to buy goods and services.

Trade area should ideally extend from outward from the service center equally in all directions. But the shape and extent of this area can be modified/influenced by

v   Competition with other centers

v   Transportation accessibility

v   Consumer preferences

Based as the principle of least effort, consumer, should travel to the nearest of the same size communities for a particular services.

The principles of least effort concept given by Zipf explained that persons seek the shortest distance and nearest alternative when choosing among routes and destinations.

Hinterland

Area from where products are delivered to the center.

Determining the trade area boundary ( VERY IMPORTANT)

Determining the trade area boundary between places unequal in size is more complex. Using gravity model approach, one can determine this boundary. The gravity model postulates that the potential power of attraction between two bodies increases with the product of their masses and decreases with distance between them.

The gravitational attraction of two places expressed as an example of ‘Interaction theory’, where economic interaction between two places varies positively according to their size and negatively according the intervening distance.

The theory is expressed in the following formula

I = P₁P₂/d

I = interaction

P₁ = population of one of the place

P₂ = population of other place

 d = distance between them

Breaking point theory ( VERY IMPORTANT)

Provide a way to predict the location of the boundary line separating trade areas around two cities unequal in size.

BP = d/1+√Pop Z/Pop Y

BP = breaking point from the smaller trade center

d= distance between the two trade centers

Pop Z = population of largest city

Pop Y = population of smaller city