Economic activities

Human needs and production
1. Primary need
  1. Housing
  2. Food
2. Secondary need
  1. Mobile phones
  2. Relationship with other people
3. To meet human material needs through the production of goods and services
4. Classification of the main economic activities
  1. Production
    1. Creation of goods and services
  2. Distribution
    1. Involves transporting goods from the producer to the consumer
  3. Consumption
    1. Is based on using the goods and services produced.
Factors of production
1. Definition
  1. The resources involved in producing goods and service
2. Natural resources
  1. They can be regenerated in different ways
  2. Are raw materials, which are provided by nature
  3. Renewable resources
    1. Can be consumed without being exhausted, because they are renewed faster than they are consumed.
    2. They can be virtually inexhaustible
      1. Water
      2. Wind
    3. They may need a period of time to regenerate
      1. Flora
      2. Fauna
  4. Non-renewable resources
    1. They are renewed more slowly than they are consumed, and their capacity for regeneration is very low
      1. Iron ore
      2. Oil
3. Capital
  1. Human capital
    1. The labour that workers contribute
  2. Physical capital
    1. Raw materials, facilities, tools and machinery
  3. Financial capital
    1. The money needed to acquire physical capital and pay human capital
4. Labour
  1. Physical
  2. Intellectual
  3. Role
    1. To produce goods or provide services in exchange for financial compensation
  4. A wage or salary is the payment which employees receive for their labour
Economic agents
1. Households
  1. Supply labour by working
  2. Use goods and services
  3. Supply financing through spending
  4. Supply financing through taxes
  5. Recieve wages and salaries
2. Businesses
  1. Produce goods and services
  2. Employ labour
  3. Provide payment for work
  4. Supply financing throug taxes
  5. Are financed by the spending of the other two agents
3. Government
  1. Produce and use goods and services
  2. Employs labour
  3. Supplies financing through wages and salaries, pensions,…
  4. Supplies financing through aid and subsidies
  5. Collect taxes
Economic systems
1. Basic economic issues
  1. What to produce
  2. How to produce it
  3. For whom
2. Tradition-based economic systems
  1. Based on
    1. Beliefs
    2. Customs
    3. Laws
  2. Example
    1. Feudal Europe
      1. Artisans in cities formed guilds
        These organisations regulated and established rules of production of production for each trade
  3. Livestock farming wasnvery important and most of the pastureland was owner by the municipalities or town councils of the time.
    1. It was known as common pasture
      1. The municipality´s residents were responsible for managing the land.
3. Capitalism and the free market system
  1. Factors of a socioeconomic system of the capitalism
    1. Private ownership
      1. Physical capital
      2. Financial capital
    2. Investment of capital
    3. Free market
      1. Regulates
        The production of goods and services
        The sale of goods and services
  2. Supply
    1. The products available on the market for a specific price and during a certain period
  3. Demand
    1. The goods or services that consumers are prepared to buy for a particular price an under certain conditions.
  4. Two conflicting scenarios
    1. Prices increase
      1. If demand is greater than supply
        There is a shortage of products
    2. Prices decrease
      1. If supply is very high and demand is low
        A surplus is created and prices decrease
4. Auhority
  1. Decisions are made by an authority, generally represented by State
  2. Social equality
    1. Ultimate aims in these economies
    2. To achieve greater social equality
  3. The state
    1. Makes a number of forecast
    2. Determines what to produce
  4. North Korea
5. Mixed
  1. Aim
    1. Is to avoid both
      1. The negative effects of the unequeal distribution of wealth in a free market
      2. The lack of efficiency that characterises authority –based systems
  2. Taxes
    1. Investing in public good and services
    2. Social security and benefits
    3. Other kind of support
  3. Nordic countries

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Economic activities

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	Created by Marcos Corcoba Abarquero almost 6 years ago