What is economy?

What is economy?

1. Definition :Choice that makes a person or government to address their needs in the sense of shortages and incentive.

2. The economy consists of two parts:

   • Microeconomics
     • The Micronoeconomia is the choice that individuals and companies make that produces a movement in the markets and influences governments.
       • Everything you want and the scarce you face. Everything you want is limited by your income and the prices you must pay.
         • Everything a person or a society can obtain is limited by productive resources available. These resources are gifts of nature, the fruit of work, and the human ingenuity and of all the tools and equipment previously produced
   • Macroeconomics
     • Macroeconomics is the study of the performance of national economies and the global economy
       • Governments can access resources according to the taxes they collect
         • Unemployment rate in a country, interest rate and how it affects the economy

3. What, how and for whom the economy is produced?

   • What: That depends on the country and the time. Example: In China, agriculture contributes 10% of total production
     • How :we produce is determined by the technology and resources we use
       • Factors of Production
         • Land
           • Gifs of the natures
         • Work
           • Time and efforts dedicated of the production
         • Bussiness Skills
           • Human resources that organize the work,land and capital
         • Capital
           • Tools, instruments, machinery, buildings to produce goods and services. Human Capital depends on the quality of the work.
   • Whom : Are the persons or entities that consume the goods and services produced

4. Personal interest-social interest

   • It's when a group of people meet their personal interest.
   • Are the persons or entities that consume the goods and services produced
   • Social interest is affected by globalization, monopolies, climate change, econimics instability

5. The Thought economic

   • Election - Interchange
   • People make rational choices when they compared benefits and costs
   • People choose when they have an incentive

6. The graphs in economy

   • Diagrama de Dispersion : Shows the relationship of two variables if the dispersion is positive
   • The graphics are also used to represent economic models