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Economics

THE LOCATION OF INDUSTRY. Economics . THE IMPORTANCE OF LOCATION.

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Economics

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  1. THE LOCATION OF INDUSTRY Economics

  2. THE IMPORTANCE OF LOCATION • The location of a firm has the ability to affect that firm’s cost of production. Firms are established with the primary aim of earning the maximum profits and as such will endeavor to select a location where they believe average cost will be at its lowest.

  3. FACTORS THAT INFLUENCE CHOICE OF LOCATION • The factors that influence the location of a firm are broken down into two (2):Economic and Non-Economic Factors

  4. ECONOMIC FACTORS 1. Nearness to the Source of Raw Materials 2. Nearness to Market 3. Nearness to the Source of Power 4. Nearness to Suitable Labour 5. Land 6. Access to Transport 7. Infrastructure 8. Linkage Industries

  5. Non-Economic Influences on Location 1. Climatic conditions 2. Government Influence 3. Nature of Activities 4. Industrial Inertia 5. Political Stability

  6. WHAT WILL DETERMINE LOCATION? • Industries will weigh the factors influencing locations against each other in deciding on where to set up. However, despite all these factors, location may depend on accident or traditions.

  7. THE REGIONAL PROBLEM • WHY? • Regional differences in unemployment rates • Industrial concentration makes a region too dependent on one industry • Urban sprawl or “conurbations” “ghetto”

  8. REGIONAL POLICY AIMS Reduce the differences in regional unemployment. This is achieved in two ways: • Taking workers to work. The movement of unemployed people from areas which have high unemployment rates to areas that are more prosperous. NOT A GOOD SOLUTION. Why not? • Taking work to the workers.assisted areas

  9. ASSISTED AREAS To encourage firms to move to or expand in assisted areas, the government provides these industries with: • Capital grants • Training grants • New factories • Preferential treatment:- government contracts

  10. Question • DISCUSS ONE ASSISTED AREA EXISTS IN THE BAHAMAS. (2 MKS) • DISTINGUISH BETWEEN ECONOMIC AND NON-ECONOMIC INFLUENCES ON LOCATION. (4 MARKS) • WHAT ARE SOME OF THE POSSIBLE EFFECTS OF REGIONAL POLICIES? (4 MARKS)

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