Understanding the Economy: Assets, Activities, and Systems

Economic Assets

The economy encompasses activities like shopping and using transportation. Economic assets are items that people produce. These include material objects obtained from nature or manufactured by us.

Economic Activities

Economic activities are those that produce economic goods. Several factors contribute to these activities:

• Natural resources: These are derived from nature.
• Human resources: These are the people who contribute their work and experience.
• Capital: This is a factor produced by machinery, buildings, etc.

Types of Economic Systems

Societies organize themselves into different economic systems. Some systems involve the state owning most of the production factors and deciding how the economy should function. In other models, governments implement laws that affect production and prices.

The Market Economy

The market economy is a system where people and companies produce, buy, and sell services freely.

The Market

The market is where goods and services are exchanged, and prices are set. It has two main elements:

• Supply: The set of goods and services offered for sale.
• Demand: The products that consumers want to buy.

Prices of goods and services are determined by supply and demand.

Economic Agents

For the market economy to function, it is essential to involve people. These are the economic agents, which can be grouped into:

• Families: These can be formed by one or many individuals, e.g., a student.
• Companies: These are organizations that aim to make a profit.

Families and the Economy

Families are consumers of goods and services, influencing demand and prices. They also provide production factors, such as labor for businesses, capital, and natural resources.

Enterprises

Enterprises are responsible for obtaining goods and services offered in the market. The employer directs them. Companies can be formed by several individuals.

Workers and Human Resources

Human resources are the people who work in a company, forming an essential factor of production. In a capitalist economy, most workers are subject to the laws of the market.

Changes in the World of Work

• The number of people seeking work has increased.
• Information and technology have revolutionized production methods and communication in business.
• Workers have more experience.
• Companies can more easily hire and dismiss employees.
• Working conditions have improved.
• There are more men than women in the workforce.