PLACES AND PRODUCTION
National Council on Economic Education, New York, NY
Geography: Focus on Economics, Lesson 7
Gross Domestic Product (GDP), a basic measure of economic output, is the total market value of all final goods and services produced in an economy in a given year. Although GDP does not account for differences in the types of goods produced, nor for differences in the distribution of income, GDP per capita (GDP divided by population) is often used to compare the economies of countries and the well-being of their citizens.
Geographers apply a spatial perspective to economic and social data using choropleth maps. A choropleth map shows differences between areas. Distinct categories of qualities can be represented by different colors or shading patterns. Four different colors could represent deserts, mountains, forests, and grasslands, for example. Choropleth maps can be used to display differences in quantities as well. The range of
population density can be divided into five to ten categories. Each category is then assigned a color or shading pattern, and each area on the map is colored based on its category of population density. Regional concentrations of population and areas of sparse population could be easily identified with such a map.
Choropleth maps that display economic data aid in the analysis of that data. This lesson uses choropleth maps of GDP per capita. This technique will be used in subsequent lessons with other measures of well-being.
Students calculate United States GDP and GDP per capita, use a choropleth map to acquire information, and create choropleth maps of GDP per capita in South America. They identify regions with high and low GDP per capita and suggest reasons why the well-being of people may be overestimated in countries with high GDP per capita and underestimated in countries with low GDP per capita.
Middle school: average to above average students.
- Gross Domestic Product (GDP)
- Choropleth Map
- Measure of Value
- Double Counting
- Final Goods and Services
- Flow of Product
- Approach Earnings and Cost
- Approach Consumer Spending, Investment Spending, Government Spending, Exports, Imports, Gross Domestic Product Per Capita
Content Standards and Benchmarks
National Standard Number: 10
Institutions evolve in market economies to help individuals and groups accomplish their goals. Banks, labor unions, corporations, legal systems, and not-for-profit organizations are examples of important institutions that is essential to a market economy.
National Standard Number: 18
A nation's overall levels of income, employment, and prices are determined by the interaction of spending and production decisions made by all households, firms, government agencies, and others in the economy.
National Standard Number: 19
Unemployment imposes costs on individuals and nations.Unexpected inflation imposes costs on many people and benefits some others, reduces the rate of growth of national living standards.
- Calculate GDP and GDP per capita.
- Acquire information from a choropleth map.
- Construct a choropleth map.
- Recognize the uses and limitations of GDP as a measure of economic well-being.
Two Class Periods
- Tell the class that this lesson is about Gross Domestic Product (GDP), a measure of economic production, which is used by economists and geographers as a measure of well-being. GDP is the total market value of all the final goods and services vices produced in an economy in a given year.
- Distribute Activity 1, Gross Domestic Product, and ask the students to read the explanation of GDP and to answer question 1. If the reading is too difficult for your students, go through it with the students, paragraph by paragraph. (United States GDP for 1993 was $6,374.0 billion.)
- Review the information from Activity 1, Gross Domestic Product, to be certain students understand:
*Definitions of GDP.
*Calculating GDP using the total spending method.
*Limitations of GDP as an indicator of economic well-being.
- Explain GDP per capita and have students answer question 2. (United States GDP per capita for 1993 was $24,683.)
- Display the transparency of Visual 1, Choropleth World Map of GDP Per Capita. Explain that this is a choropleth map that will be used to analyze regional variations in GDP per capita. Tell the students that the range of GDP per capita is $80 to $32,790. That range has been divided into 9 categories which are shown in the legend or key. Each category has a shading pattern associated with it, and each country is shaded according to its category. Ask the students to complete the following statements:
The GDP per capita of Canada is between
$ __________ and $ _________.
(GDP per capita of Canada is between $20,000 and $24,999.
Four countries with GDP per capita between $15,000 and $19,999 are Great Britain, France, Italy, and Australia. The nations of South America have GDP per capita between $300 and $4,999.)
Four countries with GDP per capita
between $15,000 and $19,999 are
__________, __________, __________, and
The nations of South America have GDP
per capita between $ __________ and
- 6. Distribute Activity 2, Constructing a Choropleth Map, and ask the students to read the first three paragraphs, which describe choropleth maps. Go over the directions for creating a choropleth map with the students and answer any questions that they have about the process.
- 7. Distribute Activity 3, Map of South America. Have each student construct a choropleth map of GDP per capita in South America. Allow students to work in pairs if they choose. (Tell the students who are having trouble getting started that the range of values from 370 to 3050 is 2680, close to 2700, and that nine mapping categories of 300 units will work well. The sample that follows is only a suggested answer. There are many other possibilities.)
Display the transparency of Visual 1, Choropleth World Map of GDP Per Capita. Some countries may be blank because they do not report data or may report it in a form not easily converted to GDP in dollars. Ask the following questions:
- Where are the countries with high GDP per capita (top four categories) located? (In general, the northern hemisphere. Students should mention continents like North America, and regions like Northern and Western Europe or Western Asia, but they may tell you about individual countries such as Japan, Italy, and Australia.)
- Where are the countries with low GDP per capita (bottom three categories) located? (South America, Central America, Africa, Asia, Eastern Europe, and the Caribbean.)
- Why might the well-being of people in low GDP per capita countries be underestimated? (GDP per capita does not include goods and services not sold in the marketplace. When people grow their own food, build their own shelter, and make their own clothes, those goods and services vices are not included in their country's GDP.)
- How can a nation increase its GDP? (Point out that for an economy to become more productive it must produce fewer goods for domestic consumption and more capital goods. It is investment that increases the productivity of workers, including investment in the workers themselves, increasing the quality of their human capital. Such investments have significant opportunity costs and economic risks.)
- Ask the students to create posters illustrating the components of Gross Domestic Product, using the flow of product approach.
Ask students to select a country with a high GDP per capita and a country with a low GDP per capita and, using geography textbooks, periodical articles, atlases, encyclopedias, and other sources, to research those countries in order to write reports describing similarities and differences between their countries and the factors that account for the differences in GDP per capita.