Economics: Production, Consumption, and Market Dynamics

Economic Activity

Economic activity encompasses all human endeavors to meet their needs. This involves:

Goods Production

Combining natural resources, technology, and labor to create goods and services for consumption.

Types of Goods

• Consumer Goods: Directly satisfy consumer needs.
• Produced Goods: Machines and tools used to produce other goods.

Marketing

Distribution and sales involve storage, transportation, and selling.

Sales Types

• Wholesale: Buying and selling large quantities to other traders.
• Retail: Buying from wholesalers and selling smaller quantities to the public.

Consumption

The use of goods and services by individuals.

Factors of Production

The essential elements for producing goods and services:

Natural Resources

Resources found in nature, transformed or extracted to create new goods.

Labor

Human activity used to produce goods or provide services.

Employment Types

• Traditional Employment: Working for a business or administration.
• Self-Employment: Working independently.

Capital

Money, buildings, installations, machinery, and technology needed for production.

Surplus

The excess production after meeting basic needs.

Market Economy (Capitalism)

Supply and Demand

The interplay of buyers and sellers in the market.

Market Elements

• Market: The place where goods are bought and sold.
• Seller: Aims to profit from selling products.
• Buyer: Aims to satisfy needs at the lowest cost.
• Supply: The goods offered by sellers.
• Demand: The number of buyers wanting a specific product.
• Price: The value of a product, determined by supply and demand equilibrium.

Publicity and Propaganda

Informing consumers about products and companies.

Economic Actors

Individuals, groups, or institutions involved in the economy:

Households (Families)

Primary consumers of goods and services.

Companies

Economic units that combine labor and capital to produce and distribute goods.

Company Classifications

• By Size: Multinationals, medium-sized, small businesses.
• By Activity: Primary (agriculture, etc.), secondary (manufacturing, etc.), tertiary (services).

State Sector

Economic and social activities undertaken by the government, funded by taxes.

Tax Purposes

• Maintaining public administration.
• Promoting economic activity and social relations.
• Providing public services and social benefits.

Job Market

Characterized by supply and demand for labor.

Active Population

People working or seeking work.

Population Categories

• Employed: People currently working.
• Unemployed: People actively seeking work.

Relocation

Moving a company to another country for lower costs or tax advantages.

Unions and Employers

• Unions: Protect workers' rights.
• Employers' Associations: Represent employers' interests.

Multinational Enterprises

Large companies operating globally.

Public vs. Private Sector

• Private Sector: Businesses not owned by the government.
• Public Sector: Government-owned entities and services.