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Factors of Production and Spatial Differentiation
"Inputs" may be "ubiquitous" or "localized", i.e. their spatial distribution may be even or uneven and clustered. Thus, inputs may have to be transported to the location of production. Similarly, markets may be local, i.e. at the place of the activity, or they may be distant. Clearly, there are transport costs to consider when considering the location of activities.
The inputs (factors of production) are combined during the production process in ways which are described or accounted for by the "production function"; in other words, the products produced by the activity are a function of the inputs and the production relations between the inputs. (outputs = f[labor, land, capital, know-how, organization, entrepreneurship, inputs from the environment etc.]).
The factor l a n d is a geographically particularly interesting and important factor, since land is of limited availability within any one region, and it is immobile. Land used for one activity is essentially not available for other activities (unless they can be stacked up in skyscrapers). Thus, activities which are "land intensive", i.e. use a relative large amount of this factor "land" per unit of output, contribute to "dispersion" of economic activities. Thus, the 'need for land' is our second (the first being "transport costs") so-called "space-differentiating force".
And the third space-differentiating force? Let's call it "internal and external agglomeration economies" (=cost reductions). If it is less costly to produce certain outputs either in a large-scale plant or close to other activities, this will tend to lead to agglomeration (not to dispersion). On the other hand, agglomerations (big Boeing plant, large downtowns) tend to lead to longer distances for travel/ transportation and higher transport costs and to more intensive land uses (Popular Midterm-QUESTION: What is the difference between "intensive land uses" and "land-intensive type of activities"???). Thus, we can explain a large part of the delicate or not so delicate balances in the spatial structures we are living in by focusing on:
These are some of the other attributes of production processes we are interested in as economic geographers:
Böventer, Edwin von [mainly 1963 & 1967]
Hoover, E., Introduction to Regional Economics, 1985, Ch.1.2
"THREE FOUNDATION STONES"
Economies of Scale:
Economies of Scale:
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