3. ECONOMIC ACTIVITY = combination
of the tasks undertaken by people to
obtain the goods required to meet their
needs.
MATERIAL GOODS IMMATERIAL GOODS
(SERVICES)
4.
5. 1st PRODUCTION:
the resultant
goods of the
economic activity.
2nd DISTRIBUTION:
the transfer of the
goods to the
consumers & their
sale.
3rd CONSUMPTION:
the use of the
goods.
COMPONENTS OF ECONOMIC ACTIVITY
6. SECTORS OF ECONOMIC ACTIVITY: ranges of activities
with several shared features
ECONOMIC
SECTORS
SECONDARY:
transformation of
natural resources
Industry, construction,
mining, energy
production
TERTIARY:
activities that
provides services.
Trade, transport,
tourism, healthcare,
education…
PRIMARY:
extraction of
natural
resources.
Agriculture, livestock
farming, forestry,
fishing.
7.
8. SECTORS OF ECONOMIC ACTIVITY:
To analyse the importance of each sector, we need to look at 2
indicators:
a) EMPLOYMENT
b) GDP (Gross Domestic Product) PIB (Producto Interior Bruto):
• It is defined as the total value of all goods & services produced
in a country in a given time period (normally, a year).
• It’s used in economics to measure the size of a territory's
economy. It enables us to know how healthy a country is,
from an economic point of view.
The importance of each sector in the economy of a country varies a
lot depending on it’s degree of development.
10. SECTORS OF ECONOMIC ACTIVITY
Primary sector: <10%
Secondary sector: 25 – 35%
Tertiary sector: >60%
DEVELOPED
COUNTRIES
Primary sector: >50%
Secondary sector: very low (in
underdeveloped countries). In emerging
countries it’s more and more important.
Tertiary sector: low
DEVELOPING
COUNTRIES
11. SECTORS OF ECONOMIC ACTIVITY
In developed countries the Secondary Sector is
losing importance, while it’s gaining importance in
emerging countries… Why is this happening?
12. ACTIVITY 1
a) P.82 ex. 1
b) Devise 2 outlines: one about the components of economic
activity & another one about the economic sectors.
c) What is “GDP”? And “GDP per capita”?
Which of these two economic indicators do you think is
better to analyse the wealth of a country and the standard
of living of its inhabitants?
d) P.82 exercise 2. Using the information on
that chart fill in worksheet 1 (pie charts
with the economic structure of developed,
developing & underdeveloped countries)
13.
14. ACTIVITY 2
DO A COMMENTARY OFTHE PIE CHARTSYOU’VE JUST
DONE
1) Introduction paragraph…What type
of charts are they? What do the
charts show us? Source?
2) Define GDP and then describe the
contribution of each sector to the
GDP of developed, developing &
underdeveloped countries.
3) Describe the contribution of each
sector to the employment in
developed, developing &
underdeveloped countries.
4) Draw your conclusions.
17. ACTIVITY 2
a) Read the text on p.84-85
b) Fill in the following chart
c) P.85 ex. 3
d) What is the difference between…
• A small, a medium & a large company?
• A public and a private company?
BUSINESSES FAMILIES STATE
FUNCTION
AIM/S
INCOME
SOURCE
18. ECONOMIC AGENTS:BUSINESSES
• Basic unit of
production.
• FUNCTION:
produce, distribute
& sell goods.
• AIM: obtain an
economic profit.
• INCOME SOURCE:
sale of goods.
FAMILIES
• Basic unit of
consumption.
• FUNCTION: buy
goods.
• AIM: satisfy their
needs.
• INCOME
SOURCE: sale of
their labour.
STATE/GOVERNMENT
• Unit of production &
consumption.
• FUNCTION: provide
public services needed
by society & consume
goods/services from
private companies.
• AIM: provide welfare.
• INCOME SOURCE:
taxes.
20. Types of businesses:
Types of
businesses
According to size
Small (<50 employees)
Medium (50-250 employees)
Large (>250 employees)
According to capital
ownership
Public companies
Private companies
According to social
organisation
Public licensed companies /
Sociedad Anónima (S.A.)
Limited companies (Ltd.) /
Sociedad Limitada (S.L.)
Cooperatives
Business = usually refers to small/medium companies
Company/Enterprise = bigger businesses
21. S.A. S.L.
Capital dividido en ACCIONES (al
portador) libremente
transmisibles a terceros.
VENTAJA: facilita la captación de
capital.
DESVENTAJA: dificulta el control
de la empresa por parte de los
socios.
Capital dividido en PARTICIPACIONES
(nominativas), que son más difíciles de
transmitir a terceros (necesidad de
acuerdo de los socios).
VENTAJA: facilita el control de la
empresa por parte de los socios.
DESVENTAJA: dificulta la captación de
capital.
Capital mínimo: 60.000€ Capital mínimo: 3.000€
En ambos casos la responsabilidad de los socios es limitada (no responden
con su patrimonio personal). Es decir, sólo pueden perder lo que han
invertido en dicha empresa.
29. To avoid the exhaustion of natural resources it is necessary to use them
according to the principle of SUSTANIABLE DEVELOPMENT
30. The production of oil
& natural gas is
unequally distributed
the countries that
produce these
energies aren’t the
ones that most
consume them.
The desire to control these limited natural
resources leads to wars & international conflicts,
and explain many political alliances.
31. Isn’t it strange that…
• …USA & Saudi Arabia have good relations, despite their
ideological differences?
• …during the revolts of the “Arab Spring” (revolts in Arabic
countries in 2010-2012), the Western countries intervened in
Lybia but not in Syria?
• … the USA was at war with Irak?
Video summarizing the conflict in Syria: https://www.youtube.com/watch?v=jdXOxaydsGM
Documentary: “Oil, smoke, mirrors” http://www.youtube.com/watch?v=xlUNQWvcqww
USA former president
(Barack Obama)
&
Saudi Arabia former king
(Abdullah bin Abdul Aziz al-Saud)
32. 2. CAPITAL
NON-NATURAL RESOURCES NEEDED FOR PRODUCTION.
CAPITAL
Physical capital:
material elements (factories,
machinery…)
Human capital:
people’s productive
capacity. It depends on
their training &
experience.
Financial capital:
economic resources (funds) used by a
company to buy what they need to
make their products.
34. 4. LABOUR
PHYSICAL OR INTELECTUAL EFFORT MADE BY PEOPLE IN
ORDERTO PRODUCE GOODS & PROVIDE SERVICES.
35. ACTIVITY 3
a) Define:
• Production factors
• Sustainable development
b) What problems does the excessive use of non-
renewable resources give rise to?
c) Devise a diagram of the production factors.
d) P. 86 – 87 exercises 1 & 2
36. Basic concepts:
Active population (población activa): people of working age
who are employed, or unemployed but available & willing to
enter the labour market.
Inactive population (población inactiva): people of working
age that aren’t available to enter the labour market. It includes
students, retired people & home makers.
Total
population
In working
age
Active
population
Employed population
Unemployed population
Inactive
population
Others
Children under 16 years old
People over 65 years old
37. Activity rate (tasa de actividad): proportion (ratio) of active
population in a country.(it is calculated among the working-age population!)
Active population X 100
People of working age
Activity rate (%)
(tasa de actividad)
Unemployed population X 100
Active population
Unemployment rate (%)
(tasa de desempleo/paro)
Unemployment rate (tasa de paro/desempleo): proportion
(ratio) between the unemployed population and the active
population.
38. Labour market (mercado laboral): it is formed by:
What do you think will happen to wages if…?
a) Supply > Demand
b) Supply = Demand
c) Supply < Demand
The labour market is determined by the market forces: supply & demand.The
price of labour (salaries/wages) depends on the amount of work that is
demanded by individuals & offered by companies.
- DEMAND for work
from individuals
- SUPPLY of jobs from
businesses
39. If the supply (available jobs) is higher than the
demand (nº of workers) (there are more jobs than
people willing to work) wages are higher.
If the demand (available people to work) is
higher than the supply (available jobs) wages
are lower.
40. In this graph you can see the evolution of
salaries in European countries… why have they
decreased during the crisis?
