Economic Activity: Production, Exchange, and Consumption
Economic Activity: Meeting Needs with Scarce Resources
Basics of Economic Activity
- Needs: Temporary and subject to limitations
- Prolongation: Satisfied until the need ceases
- Repetition: Feeling decreases with repeated experiences
Means of Economic Activity
- Economic Goods: Limited resources
- Free Performance: Considering the need for production
Types of Economic Events
Production
- Raw Materials: Natural resources
- Labor Force: Utilized to produce goods and services
- Capital: Equipment, money, and labor force financing
Types of Goods:
- Consumer Goods: Satisfy consumer needs
- Indirect Production Goods: Used to produce consumer goods
- Basic Goods: Essential (e.g., water)
- Complementary Goods: Enhance consumer goods (e.g., boxes)
Exchange
Links production and consumption.
Consumption
Satisfying needs by using goods or services.
Consumer Units:
- Families: Act as economic units
- Agricultural Units: Engage in both production and consumption
State and Economy
States regulate supply and distribution to meet community needs.
State Revenue:
- Taxes
- Fees
- Social contributions
- Public debt
State Economic Policies:
- Tariff policy (customs)
- Fixed exchange rate
- Nationalization of companies or banks
- Privatization of public enterprises
Underground Economy: Activities outside legal channels (e.g., black market)
Elements of the Economy
Money
Accepted as a medium of exchange, not for consumption.
Monetary Policy:
- Inflation: Widespread and continuous price increases
- Devaluation: Loss of value of a currency
Stock Market
Where securities (representing rights and obligations) are bought and sold.
Types of Securities:
- Shares: Represent ownership in a company
- Bonds: Promise to repay a loan with interest
- Public Funds: Similar to bonds, but issued by the state
- Mutual Funds: Collections of various securities
Types of Economic Activity
Sectors and Activities
- Primary: Agriculture, livestock, fishing, forestry
- Secondary: Extraction, production, and processing of consumer goods
- Tertiary: Exchange activities and services
- Higher Tertiary: Financial and industrial activities
Economic Systems
Certain persons or entities controlling the organization of production process, exchange and consumption Decisions taken different to getting the product to consumers
Capitalism 4.1
Economic system based on private ownership of means of production, which are used to obtain the maximum benefit possible. Capitalism, free trade became a monopoly capitalism that is the concentration of firms to obtain a monopoly in the sector and universialitzacio system outside Europe and the U.S.. The objective of large concentrations of companies with thousands of workers was to increase production but the aim was to control prices as a consequence laugment production and reduced competition.
= Taylorist production system trbal string k is attaching great importance to its time and use.
The new industrial concentrations can be:
cartels-agreements between firms k = retain their autonomy
= Trust-groups of companies in the same sector
=-Monopolies operate a service
=-Holding Companies for full or partial control over other companies
The result was the expansion of the world. the era of imperialism came to Forman intervanvi the uneven and while some countries are supplying their products worldwide, others are the source of raw materials and are forced to buy products manufactured in the north