Distribution of Global Resources

Global resources can be as easy as basic needs. Like food, clothing, shelter, leisure and cultural
activities.

What is a Resource?
A resource is anything that is useful to humans. It helps us establish a goal to keep business and
people going. There are three basic types of resources.

Natural Resources - which are materials that can be found in nature and oppressed to make a
profit. There are also two types of Natural Resources. Renewable Resources - Which are any
resources that can replace itself within a relatively short period of time. And then there
are Non-Renewable Resources - Which are resources that have taken millions of years to be
produced and yet we consume them everyday.

Capital Resources
These are resources that "a society uses to further the creation of wealth." It includes printed
money, machinery, factories and other kinds of buildings and equipment.

Human Resources - Determines a nation's strength, and that of the people who live there.

Distribution of Global Resources
All three types of resources share the same trait, and that's uneven distribution. Some country's
have more than others. Like clean drinking water or enough food for everyone. The causes for
uneven distribution of resources are physiography, climate, and geological history.

Land Resources
Factors that can contribute to the uneven distribution in agriculture are climate, relief, geology,
and human settlement.

Water Resources
Between 3 and 5 million people die each year because of unsafe water and bad sanitation. In
Canada alone, each person uses an average of 350 litres of water a day. In Europe they use an
average of 165 litres a day, and in African countries they use only 3 litres a day. Uneven
distribution in water is because parts of the world have little to no rainfall in a year, others get
too much.

Average Daily Water Use
Food as a Resource
Food is one of the more important resources in life. You need it in order to survive. We
need enough land to feed almost 6 billion people. An estimated 60 million people starve
each year, and nearly 800 million others, 200 of them being children, suffer from
malnutrition.

Human Factors Affecting Food Resources
War, because where there's war, you are unable to grow food. There is debt. If you
have little to no money, you are unable to purchase foods to survive. Recently, food has
gone up in price, sending the less developed countries and the poor further back.
Technology is another factor. If you don't have the technology to crop your food as fast
as it grows, you will lose it because of the heat, and unfertile soils. With the Green
Revolution and Genetically Modified Foods your crops grow twice as fast as they
normally would, leaving farmers little time to harvest.

Aquaculture
Defined as "the growing and harvesting of aquatic plants and animals for human
consumption. Altough it is good to have, Aquaculture can cause some problems. Water
pollution, fish feces are dumped back into the water, contaminating the breeding areas,
and killing the algae. Wetlands loss, when these lands were drained and turned into fish
farms, there is a loss of habitat, and animals. and mangrove destruction, when they
were removed, the coastal environments are ruined through increased soil erosion,
flooding, habitat loss, and salinization ("the accumulation of salts in topsoil to such an
extent that the soil is made unproductive") of farm soils.

Comparative advantage
The theory of comparative advantage is an economic theory about the potential gains from
trade for individuals, firms, or nations that arise from differences in their factor
endowments or technological progress.
[1]
In an economic model, an agent has a comparative
advantage over another in producing a particular good if he can produce that good at a lower
relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior to trade.
[2]
The
closely related law or principle of comparative advantage holds that under free trade, an agent
will produce more of and consume less of a good for which he has a comparative advantage.
[3]

David Ricardo developed the classical theory of comparative advantage in 1817 to explain why
countries engage in international trade even when one country's workers are more efficient at
producing everysingle good than workers in other countries. He demonstrated that if two countries
capable of producing two commodities engage in the free market, then each country will increase its
overall consumption by exporting the good for which it has a comparative advantage while importing
the other good, provided that there exist differences in labor productivity between both
countries.
[4][5]
Widely regarded as one of the most powerful
[6]
yet counter-intuitive
[7]
insights in
economics, Ricardo's theory implies that comparative advantage rather than absolute advantage is
responsible for much of international trade.

The classical theory
Writing several decades after Smith in 1808, Robert Torrens articulated a preliminary
definition of comparative advantage as the loss from the closing of trade:
"[I]f I wish to know the extent of the advantage, which arises to England, from her
giving France a hundred pounds of broad cloth, in exchange for a hundred pounds of
lace, I take the quantity of lace which she has acquired by this transaction, and
compare it with the quantity which she might, at the same expense of labour and
capital, have acquired by manufacturing it at home. The lace that remains, beyond
what the labour and capital employed on the cloth, might have fabricated at home, is
the amount of the advantage which England derives from the exchange.
Ricardo's example[edit]
In a famous example, Ricardo considers a world economy consisting of two
countries, Portugal and England, which produce two goods of identical quality. In
Portugal, the a priori more efficient country, it is possible to
producewine and cloth with less labor than it would take to produce the same
quantities in England. However, the relative costs of producing those two goods differ
between the countries.
Hours of work necessary to produce one unit
Country Cloth Wine
England 100 120
Portugal 90 80

Absolute advantage
In economics, the principle of absolute advantage refers to the ability of a party (an
individual, or firm, or country) to produce more of a good product or service than
competitors, using the same amount of resources. Adam Smith first described the
principle of absolute advantage in the context of international trade, using labor as
the only input. Since absolute advantage is determined by a simple comparison
of labor productivities, it is possible for a party to have no absolute advantage in
anything;
[1]
in that case, according to the theory of absolute advantage, no trade will
occur with the other party.
[2]
It can be contrasted with the concept of comparative
advantage which refers to the ability to produce specific goods at a
lower opportunity cost.
Origin of the theory[edit]
The main concept of absolute advantage is generally attributed to Adam Smith for his
1776 publication An Inquiry into the Nature and Causes of the Wealth of Nations in
which he countered mercantilist ideas.
[1][3]
Smith argued that it was impossible for all
nations to become rich simultaneously by following mercantilism because the export
of one nation is another nations import and instead stated that all nations would gain
simultaneously if they practiced free trade and specialized in accordance with their
absolute advantage.
[1]
Smith also stated that the wealth of nations depends upon the
goods and services available to their citizens, rather than their gold reserves.
[4]
While
there are possible gains from trade with absolute advantage, the gains may not be
mutually beneficial. Comparative advantage focuses on the range of possible mutually
beneficial exchanges.
Examples[edit]
Example 1[edit]

Party B has the absolute advantage.
Party A can produce 5 widgets per hour with 3 employees.
Party B can produce 10 widgets per hour with 3 employees.
Assuming that the employees of both parties are paid equally, Party B has an absolute
advantage over Party A in producing widgets per hour. This is because Party B can
produce twice as many widgets as Party A can with the same number of employees.


customs union
Agreement between two or more (usually neighboring)countries to remove trade
barriers, and reduce or eliminatecustoms duty on mutual trade. A customs union
(unlike afree trade area) generally imposes a common external-tariff (CTF)
on imports from non-member countries and (unlike acommon market) generally does
not allow free movement of capital and labor among member countries.