Models you must know
The 26 models the course and exam description names, each drawn, with what it claims, what it assumes, one limit and a real, dated example. A model is a simplified idea, not a fact about a place: on the exam, apply it to a named place and say where it fits and where it fails. 22 are flagged with the model students most often mix them up with.
Three habits that save points
- Apply it to a named place. "Chicago in the 1920s fits the concentric zone model" earns more than a definition of the model.
- Say "consistent with", not "is". A country's data are consistent with stage 3 of the demographic transition; the country is not in stage 3 as a fact.
- Give a limit with its reason. "It was built on one US city before cars spread homes in every direction" is a limit; "it is old" is not.
Unit 1: Thinking Geographically
Environmental determinism and possibilism
- Determinism: the land decidesView 1 (old, rejected)
- Possibilism: people chooseView 2
- What it claims
- Determinism, an old and rejected idea, says the physical environment decides how people live. Possibilism says the environment sets limits and offers options, and people choose among them with their culture and technology.
- It assumes
- Determinism: climate and land shape behavior directly.
- Possibilism: people can change or work around their environment.
- One limit
- Determinism ignores culture, technology and choice, and it was used to justify European rule over other peoples; possibilism can understate real limits such as drought.
- A real example
- Possibilism: people in the Netherlands have drained land from the sea since the Middle Ages, and the Flevoland polders, drained in the 1950s and 1960s, became a province in 1986.
Easy to confuse with Demographic transition model. Not a stage model: these are two views of how much the environment controls people.
Unit 2: Population and Migration Patterns and Processes
Demographic transition model
- Birth rate
- Death rate
- Total population
- High birth rate, high death rateStage 1
- High birth rate, falling death rateStage 2
- Falling birth rate, low death rateStage 3
- Low birth rate, low death rateStage 4
- Birth rate below the death rateStage 5
- What it claims
- Birth and death rates fall in sequence as a society changes, so population growth starts slow, speeds up, then slows again. This course shows five stages; some versions of the model show only four.
- It assumes
- Death rates fall first, as food, clean water and medicine improve.
- Birth rates fall later, as children survive, more people live in cities and more women go to school and work for pay.
- One limit
- It was built mostly from European and North American history. Countries that changed later, such as many in Asia and Africa, moved through the stages faster and in different ways.
- A real example
- In 2023 Japan recorded about 727,000 births and about 1.58 million deaths (Japan's Ministry of Health, Labour and Welfare, 2024): rates consistent with stage 5, a population shrinking from natural decrease.
Easy to confuse with Epidemiological transition. The demographic transition tracks birth and death rates; the epidemiological transition tracks what people die of.
Epidemiological transition
- Deaths from infection and famine
- Deaths from chronic diseases
- Typical age at death
- Pestilence and famineStage 1
- Receding pandemicsStage 2
- Degenerative and human-made diseasesStage 3
- Delayed degenerative diseasesStage 4
- What it claims
- As a society changes, the main causes of death shift from infections and famine to chronic diseases such as heart disease and cancer.
- It assumes
- Better food, clean water and medicine cut deaths from infection first.
- People then live long enough for chronic diseases to become the main causes of death.
- One limit
- New and returning infections break the sequence. Pandemics and new or drug-resistant infections can make infectious disease a leading cause of death again.
- A real example
- In the United States, the leading causes of death in 1900 were pneumonia and influenza, tuberculosis and diarrhea; in 2022 they were heart disease and cancer (CDC, National Center for Health Statistics): a move into the degenerative stage.
Easy to confuse with Demographic transition model. Its stages are about causes of death, not the birth and death rates the demographic transition shows.
Malthusian theory
- Solid line
- Dashed line
- Shaded: the gap
- Population (geometric growth)Spot 1: the line that curves upward
- Food supply (arithmetic growth)Spot 2: the straight line
- Point where food runs shortSpot 3: where the lines cross
- Checks: famine, disease, warSpot 4: the gap after they cross
- What it claims
- Population grows faster than the food supply, so in time food runs short and checks such as famine and disease follow.
- It assumes
- Population grows geometrically (1, 2, 4, 8, ...).
- Food supply grows arithmetically (1, 2, 3, 4, ...).
- One limit
- He did not foresee how much technology would raise food output. Machines, fertilizer and new crop varieties raised food output far faster than a straight line.
- A real example
- Malthus wrote in 1798. World population grew from about 1 billion around 1800 to about 8.2 billion in 2024 (UN WPP 2024), and food supply per person still rose, largely through new farm technology such as the Green Revolution.
Ravenstein’s laws of migration
- Large circle: the big city
- Small circle: a town
- Dot: a village
- A flow of migrants
- Dashed arrow: a move out
- Most migrants move a short waySpot 1: the many short arrows into a nearby town
- Migration often happens in stepsSpot 2: the chain from village to town to city
- Each flow has a counterflowSpot 3: the dashed arrow out of the city
- Long-distance moves go to big citiesSpot 4: the long arrow straight to the city
- What it claims
- Patterns in who moves, how far and where: most moves are short, many happen in steps, each flow has a counterflow, and long-distance migrants head for big cities.
- It assumes
- People move mostly for economic reasons.
- Distance makes moving harder, so short moves are most common.
- One limit
- It was built on 19th-century British data. Its laws describe Britain in the 1800s, and patterns differ in other places and times.
- A real example
- Ravenstein drew his laws mainly from the British census of 1881, in papers published in 1885 and 1889: most migrants moved a short way, many of them toward growing industrial towns such as Manchester and Liverpool.
Unit 3: Cultural Patterns and Processes
Types of diffusion
- RelocationSpot 1: spreads as the people who carry it move
- ExpansionSpot 2: spreads while it stays strong in its hearth
- ContagiousSpot 3: spreads person to person to nearby places
- HierarchicalSpot 4: spreads from big, connected places down
- StimulusSpot 5: the idea spreads, but the trait changes
- What it claims
- A trait spreads from its hearth in two main ways: with people who move (relocation) or while it stays strong at home (expansion), which can be contagious, hierarchical or stimulus.
- It assumes
- Every trait starts at a hearth, a place where it began.
- How it spreads depends on who carries it and through which places.
- One limit
- Real spread usually mixes several types. A trait can spread through cities first and then to their neighbors, which is hierarchical and contagious at once.
- A real example
- Relocation: Spanish spread to the Americas with colonists after 1492. Contagious: COVID-19 spread from person to person after the first cases were reported in Wuhan, China, in December 2019 (WHO).
Easy to confuse inside this model. Relocation diffusion moves with migrants, so the source loses some of its carriers; expansion diffusion (contagious, hierarchical, stimulus) spreads while the source keeps the trait.
Unit 4: Political Patterns and Processes
Boundary types by origin
- Boundary
- Old boundary line, no longer used
- Where one language group lives
- GeometricSpot 1: a straight line along a parallel
- AntecedentSpot 2: drawn before many people settled the area
- SubsequentSpot 3: drawn as the area grew, after people settled
- ConsequentSpot 4: drawn to separate two language groups
- SuperimposedSpot 5: drawn by an outside power through a group
- RelictSpot 6: the dashed line, no longer a boundary
- What it claims
- Boundaries can be sorted by how and when they were drawn: antecedent, subsequent, consequent, superimposed, relict and geometric.
- It assumes
- A boundary’s type comes from its history: who drew it, when, and around what.
- One limit
- One boundary can fit more than one type. A straight line drawn by an outside power is both geometric and superimposed.
- A real example
- The 49th parallel between Canada and the United States, agreed in 1818 and 1846 before most settlers arrived, is geometric and antecedent; the pieces of the Berlin Wall (1961 to 1989) left standing are a relict boundary.
Easy to confuse inside this model. Antecedent is drawn before most settlers arrive; subsequent is drawn after, as the cultural landscape takes shape; a consequent boundary is a subsequent one drawn along a cultural line; superimposed is forced on by an outside power.
Centripetal and centrifugal forces
- Centripetal: a shared languageTier 1: pulls together
- Centrifugal: a deep regional divideTier 2: pushes apart
- What it claims
- Centripetal forces pull a state's people together; centrifugal forces push them apart. The balance between them shapes whether a state holds together or devolves power.
- It assumes
- A shared trait can unite and a sharp divide can split.
- The same trait can work in either direction at different scales.
- One limit
- It names forces but does not measure them, so it cannot say on its own whether a state will break apart.
- A real example
- In Belgium, the language divide between Dutch-speaking Flanders and French-speaking Wallonia is a centrifugal force; Belgium became a federal state in 1993, partly to manage it.
Easy to confuse with Boundary types by origin. These are forces within a state, not types of boundary lines.
Unit 5: Agriculture and Rural Land-Use Patterns and Processes
Von Thünen model
- Market gardening and dairyingRing 1 (next to the market)
- Forest (wood and fuel)Ring 2
- Grain and field cropsRing 3
- Livestock ranchingRing 4 (outermost)
- What it claims
- Farmers choose what to grow by the cost of moving it to one market, so land use forms rings around the market town.
- It assumes
- One market town on a flat, uniform plain with the same soil and climate everywhere.
- Farmers carry goods to market themselves, so cost grows with distance.
- One limit
- It assumes a flat, uniform plain with one market. Real land has hills, rivers, different soils and many markets.
- A real example
- Von Thünen published The Isolated State in 1826, drawn from his own estate near Rostock, Germany. Perishable farming still clusters near big markets: the greenhouses of the Westland area near Rotterdam and The Hague supply fresh vegetables and flowers.
Easy to confuse with Bid-rent theory. Von Thünen rings are farm land uses around a market town; bid-rent is land uses in a city, from the CBD outward.
Commodity dependence
- One main raw exportStage 1
- Its world price fallsStage 2
- Export earnings and jobs fallStage 3
- Debt rises and services are cutStage 4
- What it claims
- A country that earns most of its export income from one or a few raw goods rises and falls with their world prices.
- It assumes
- Raw goods prices swing more than prices of factory goods.
- The country has few other exports to fall back on.
- One limit
- Some countries that export mostly raw goods, such as Norway with oil, stay wealthy because they save and invest the earnings.
- A real example
- In 2015, as world copper prices fell, Zambia, whose exports are mostly copper, saw its currency, the kwacha, lose much of its value against the dollar.
Easy to confuse with Dependency theory. Commodity dependence is about relying on a few exports; dependency theory is a theory of why poorer countries stay poor.
Unit 6: Cities and Urban Land-Use Patterns and Processes
Bid-rent theory
- Retail and officesSpot 1: the steepest part, at the CBD
- IndustrySpot 2: the next part out
- HousingSpot 3: the flatter part farther out
- FarmingSpot 4: the flattest part, farthest out
- What it claims
- Land users bid more for land with the best access to the center, so the price of land, and how intensely it is used, falls with distance from the CBD.
- It assumes
- One center with the best access.
- Each land user pays only as much as access is worth to it.
- One limit
- Many cities have several centers, not one CBD. Edge cities and suburban centers create more than one peak in land value.
- A real example
- In Chicago, the tallest office towers, such as the Willis Tower (finished in 1973), stand in the Loop, where land costs the most; housing and then farms take over as land gets cheaper with distance.
Easy to confuse with Von Thünen model. Both are rings set by distance to a center, but bid-rent is about who can pay the most for city land; von Thünen is about farm products and transport costs.
Rank-size rule and primate city
- The rule: rank n has 1/n of the largest
- A city
Rank-size: the second city has half the people of the largest (600,000 here), the third a third, and so on. Primate city: the largest city is more than twice the size of the second (here more than three times), so every other city falls far below the rule's curve.
- City of 1,200,000Rank 1 (largest city)
- City of 600,000Rank 2
- City of 400,000Rank 3
- City of 300,000Rank 4
- What it claims
- In some countries the city ranked n has about 1/n the people of the largest city. Where one city is far larger than the rest, it is a primate city.
- It assumes
- City sizes follow a regular pattern down the ranks.
- One limit
- It fits some countries, not those with a primate city. Where one city is far larger, the rule does not hold.
- A real example
- In the 2020 US census, New York City had about 8.8 million people, Los Angeles about 3.9 million (about half) and Chicago about 2.7 million (about a third): close to the rank-size rule.
Easy to confuse with Central place theory. Rank-size is about how big each city is by rank; central place theory is about the spacing and market areas of centers. A primate city breaks the rank-size rule: it is far more than twice the second city.
Gravity model
- Circle: a town (bigger area, more people)
- Band width: how much they interact
Interaction grows with both populations and falls with the square of the distance: P1 × P2 ÷ distance². Twice as far: one quarter as much.
- Pair B: 7 and 4 million, 200 kmMost interaction
- Pair C: 5 and 2 million, 300 kmMiddle
- Pair A: 2 and 1 million, 400 kmLeast interaction
- What it claims
- Interaction between two places (trade, travel, migration) grows with their populations and falls with the distance between them.
- It assumes
- Bigger places attract more interaction.
- Distance makes interaction harder (distance decay).
- One limit
- Borders, language and culture also shape interaction. Two big, close cities across a closed border may interact very little.
- A real example
- In 2019 Dublin to London was one of the busiest international air routes in Europe: two large cities a short flight apart, as the gravity model expects.
Easy to confuse with Rank-size rule and primate city. The gravity model predicts interaction between two places from size and distance; rank-size predicts city sizes alone.
Central place theory
- Large dot: a bigger place
- Small dot: a smaller place
- Edge of a market area
- City (high-order center)Spot 1: the center of the largest hexagon
- Town (middle-order center)Spot 2: a corner of the largest hexagon’s inner ring
- Village (low-order center)Spot 3: a small dot between those corners
- Market area of a villageSpot 4: the small shaded hexagon
- What it claims
- Settlements of different sizes serve market areas shaped like hexagons; bigger places offer higher-order goods that people travel farther for.
- It assumes
- A flat plain with people and buying power spread evenly.
- People shop at the nearest place that offers what they need.
- One limit
- It assumes a flat plain with people spread evenly. Real land has hills, rivers and uneven population.
- A real example
- Christaller published the theory in 1933 from southern Germany, where cities such as Munich, Nuremberg and Stuttgart served as high-order centers with market towns spaced between them.
Easy to confuse with Gravity model. Central place theory explains where centers sit and how far people travel for each good (range and threshold); the gravity model explains how much two places interact.
Burgess concentric zone model
- Zone in transition (factories)Ring 1 (next to the CBD)
- Working-class homesRing 2
- Middle-class homesRing 3
- Commuter zoneRing 4 (outermost)
- What it claims
- A city grows outward from its CBD in rings, with newer and wealthier housing farther out.
- It assumes
- One CBD at the center.
- People move outward as they can afford to, and newcomers settle near the center.
- One limit
- It was built on one city, Chicago, in the 1920s. Other cities, and later times, differ.
- A real example
- Chicago in the 1920s: the Loop at the center, factories and immigrant neighborhoods in the zone around it, and commuter towns along the rail lines beyond the city.
Easy to confuse with Hoyt sector model. Burgess draws rings around the CBD; Hoyt draws wedges along transport lines.
Hoyt sector model
- Rail line
- Boulevard to the lakeshore
- Water
- Industry and warehousesSpot 1: the wedge along the rail line
- Low-income housingSpot 2: the wedges on both sides of the rail wedge
- Middle-income housingSpot 3: the wedges next to those
- High-income housingSpot 4: the wedge along the boulevard to the lake
- What it claims
- Land use grows outward from the CBD in wedges along transport routes; high-income housing follows the most attractive corridor, and low-income housing sits beside industry.
- It assumes
- One CBD at the center.
- A land use that starts along a route keeps growing outward along it.
- One limit
- It still assumes one CBD at the center. Many cities grow around several centers.
- A real example
- Hoyt's 1939 study of 142 US cities: in Chicago, high-rent housing ran north along the Lake Michigan shore, away from the industry along the rail lines.
Easy to confuse with Burgess concentric zone model. Hoyt's land uses run out from the CBD in wedges along roads and rails, not in even rings.
Harris and Ullman multiple nuclei model
- Rail line
- Main road or highway
- River, with a port
- Central business districtSpot 1: the old center where the main roads meet
- Wholesale and light manufacturingSpot 2: beside it, along the rail line
- Heavy industrySpot 3: by the river port and the rail line
- Outlying business districtSpot 4: a second center of shops and offices
- Residential suburbSpot 5: far from industry, on the quiet side
- Industrial suburbSpot 6: out along the rail line, beyond the city
- What it claims
- A city grows around several centers (nuclei), not one CBD; some activities cluster together, and others keep apart.
- It assumes
- Some activities need special sites (a port, a rail yard).
- Similar activities gain by clustering; some, like heavy industry and high-income housing, repel each other.
- One limit
- It does not predict where new centers will form. It shows that a city has several nuclei, not where the next one goes.
- A real example
- Metro Los Angeles in the 2020s, with separate centers at Downtown, the Port of Los Angeles, the airport district around LAX, university campuses and the film studios.
Easy to confuse with Galactic city model. Multiple nuclei is several specialized centers inside one city; the galactic city is a car-based metro area with edge cities ringing an old downtown.
Galactic city model
- Highway (the loop is a ring road)
- Old central city (CBD)Spot 1: the old center
- Edge city (offices and malls)Spot 2: where a highway meets the ring road
- Suburban housingSpot 3: the areas between highways
- Airport and business parkSpot 4: the big site with runways
- What it claims
- In a car-based metropolitan area, the old central city is one center among many; offices, shops and homes spread along highways and a beltway, with edge cities at the junctions.
- It assumes
- Most people travel by car.
- A beltway and highways make places far from the old CBD easy to reach.
- One limit
- It fits US car-based metros better than other places. Cities built around walking or transit do not spread this way.
- A real example
- Tysons, Virginia, outside Washington, D.C., grew from a rural crossroads in the 1960s into a cluster of offices and malls along highways, and was described as an edge city in 1991.
Easy to confuse with Harris and Ullman multiple nuclei model. The galactic city adds edge cities and beltways around a metro area; multiple nuclei describes separate centers inside one city.
Latin American city model
- Main avenue
- River
- CBDSpot 1: the center
- Spine and elite housingSpot 2: the wedge along the main avenue
- Zone of maturitySpot 3: the ring next to the center
- Zone of in situ accretionSpot 4: the middle ring
- Squatter settlementsSpot 5: the outer ring
- Disamenity sectorSpot 6: the wedge along the river
- What it claims
- A CBD and a commercial spine with elite housing run out along a main avenue; quality of housing falls toward the edge, where squatter settlements grow.
- It assumes
- Colonial planning centered the city on a plaza and its CBD.
- Rapid growth from rural migrants happens at the edge.
- One limit
- Cities in the region differ a lot from one another. Each city’s site and history shape it in its own way.
- A real example
- In Mexico City, the Paseo de la Reforma, laid out in the 1860s, became a spine of offices and wealthy homes running west from the old colonial center.
Easy to confuse with African city model. Both have squatter or informal settlements at the edge, but only the Latin American model has a commercial spine with elite housing.
Your class may name its authors, Ernst Griffin and Larry Ford (1980).
Southeast Asian city model
- Water
- Old colonial port zoneSpot 1: at the waterfront
- Western and immigrant commerceSpot 2: next to the waterfront
- Squatter settlementsSpot 3: scattered at the edge of the city
- Market gardeningSpot 4: the band beyond the city
- What it claims
- Many port cities in Southeast Asia focus on the old colonial port, not one strong CBD, with commercial zones beside it and squatter areas and farmland at the edge.
- It assumes
- The colonial port was the reason the city grew.
- Trade, not one CBD, organizes the city.
- One limit
- Cities in the region differ a lot from one another. Not every city is a port, and each has its own history.
- A real example
- Jakarta, Indonesia, grew around the port of Batavia, founded by the Dutch in 1619; the old port zone sits on the coast, with commercial zones inland and informal settlements on the edges.
Easy to confuse with Latin American city model. The Southeast Asian model centers on the old colonial port, not a plaza and CBD with a spine.
Your class may name its author, T. G. McGee (1967).
African city model
- Rail line
- Colonial CBDSpot 1: the center laid out in a grid
- Traditional CBDSpot 2: the center with winding streets
- Market zoneSpot 3: the area below the two centers
- Ethnic and mixed neighborhoodsSpot 4: the ring of neighborhoods
- Mining and manufacturingSpot 5: the wedge along the rail line
- Informal satellite townshipsSpot 6: beyond the city edge
- What it claims
- Many cities in Sub-Saharan Africa have three central areas side by side (a colonial CBD, a traditional CBD and a market zone), with neighborhoods around them and informal settlements beyond the edge.
- It assumes
- Colonial rule built a separate Western-style center beside an older one.
- Rapid growth adds informal settlements at the edge.
- One limit
- Cities across Africa differ a lot. A model of a whole region’s cities cannot fit every city.
- A real example
- Nairobi, Kenya, founded in 1899 as a railway depot, has a colonial-era CBD, a busy market zone and informal settlements such as Kibera.
Easy to confuse with Latin American city model. The African model has three CBDs (colonial, traditional and market) instead of one CBD with a spine.
Your class may name its author, Harm de Blij.
Unit 7: Industrial and Economic Development Patterns and Processes
Least cost theory
- Rail line
- Water
- Copper smelter (loses weight)Spot 1: next to the mine
- Soft-drink bottler (gains weight)Spot 2: in the market city
- Refinery for imported crude oilSpot 3: at the port, where cargo is unloaded
- What it claims
- A factory locates where its costs of transport, labor and clustering are lowest; a process that loses weight locates near its raw materials, one that gains weight near its market.
- It assumes
- Firms only try to keep costs low.
- Transport cost depends on weight and distance.
- One limit
- It assumes firms only try to keep costs low. Owners also choose places for markets, skills or quality of life.
- A real example
- Copper is smelted near the mines in Zambia's Copperbelt, where smelters opened in the 1930s: smelting loses weight, so it pays to process the ore before shipping it.
Easy to confuse with Central place theory. Least cost theory places one factory by transport, labor and agglomeration costs; central place theory places markets and services.
Your class may name Alfred Weber (1909).
Rostow’s stages of economic growth
- Farm work
- Factory work
- Service work
Each step is filled with the share of jobs at that stage (illustrative). Higher steps: more output and spending per person.
- Traditional societyStage 1
- Preconditions for take-offStage 2
- Take-offStage 3
- Drive to maturityStage 4
- High mass consumptionStage 5
- What it claims
- Countries develop by passing through five stages, from a traditional farming society to an economy of high mass consumption.
- It assumes
- Every country follows the same path that Western Europe and North America took.
- Investment and industry drive growth.
- One limit
- It assumes every country follows one Western path. Countries develop in different ways and orders.
- A real example
- Rostow published The Stages of Economic Growth in 1960, drawing on the histories of Britain and the United States; South Korea's fast growth from the 1960s on is often read as a take-off.
Easy to confuse with Wallerstein’s world system theory. Rostow has each country climb the same five stages on its own; Wallerstein sees one world economy with core, semiperiphery and periphery.
Wallerstein’s world system theory
- Raw materials and cheap labor flow in
- Finished goods and profits flow out
- High wages, high-tech goods, capitalTier 1: Core
- A mix of core and periphery activitiesTier 2: Semiperiphery
- Low wages, raw materials for exportTier 3: Periphery
- What it claims
- One world economy links core, semiperiphery and periphery; the core gains most from the links. Dependency theory and commodity dependence explain why the periphery can stay poor.
- It assumes
- Countries are tied together in one capitalist world economy.
- Tiers are positions in that system, not stages; countries can move between them.
- One limit
- Countries are hard to place, since tiers are not measured one way. Different measures can put a country in different tiers.
- A real example
- Wallerstein set out the theory in 1974. Countries often classed as semiperiphery include Brazil, China, India and Mexico, but the tiers are a model, not an official list.
Easy to confuse with Rostow’s stages of economic growth. World-system theory has tiers in one connected economy, not stages a country passes through alone.
Easy to confuse with Dependency theory. Dependency theory has two groups, rich and poor, and blames trade ties for poverty; world-system theory adds the semiperiphery.
Dependency theory
- Sells factory goods, lends moneyTier 1: the richer core
- Sells cheap raw materialsTier 2: the poorer periphery
- What it claims
- Poorer countries stay poor because of how they are tied to richer ones: since colonial times they export cheap raw materials and import costly factory goods.
- It assumes
- The world economy has a rich center and a poor edge.
- Trade ties built under colonial rule continue after independence.
- One limit
- Some former colonies, such as South Korea and Singapore, became wealthy through trade with richer countries.
- A real example
- In the 1950s, economists at the UN Economic Commission for Latin America argued that exporting raw goods and importing factory goods kept the region poor.
Easy to confuse with Wallerstein’s world system theory. Dependency theory has two groups; world-system theory adds a semiperiphery and treats the world as one system.
Easy to confuse with Commodity dependence. Dependency is a theory of poverty; commodity dependence is one pattern of trade it points to.
Complementarity and comparative advantage
- Each has what the other needsStage 1
- Each makes what costs it leastStage 2
- They trade and both gainStage 3
- What it claims
- Trade happens when one place has what another needs (complementarity), and each place gains by making what it gives up the least to make (comparative advantage).
- It assumes
- Goods can be moved at a cost worth paying.
- Each place can shift workers and land into the good it makes best.
- One limit
- It leaves out who wins and loses inside a country: workers in a sector that shrinks under trade can lose their jobs.
- A real example
- Costa Rica grows bananas in its warm lowlands and Canada grows wheat and makes machines, so each supplies what the other needs; Ricardo explained comparative advantage in 1817 with English cloth and Portuguese wine.
Easy to confuse with Gravity model. Complementarity says why two places trade at all; the gravity model says how much, from size and distance. Comparative advantage is not absolute advantage: a country better at everything still gains by trading.
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