Fundamentals of Economic Activity and Production
Understanding Economic Activity
What is economic activity? People have many needs: food, clothing, shelter, and medical care. We call activity any process by which we obtain the products and services that meet these needs. Economic activities cover three stages: producing what we need, distribution, and consumption.
The needs and desires of people are endless, but the means we use to meet them (raw materials, work, money, etc.) are limited. Therefore, it is necessary to choose what goods and services are produced, in what quantity, by what means, how to distribute the products, and what percentage of the profits will go to investment. Economics also analyzes consumer behavior: what products they need, how much they spend, and more. Thus, the...