3. INDEX Introduction
1. Economic Systems
1.1. Subsistance economies
1.2. Capitalist economies
1.3. Planned economies
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1.3. Planned economies
2. How economic activity
works
3. Production factors
4. Economic agents
5. The labour market
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5. People obtain the
resources they need to
live through economic
activity.
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Everything that we
consume, such as
houses, food and clothes,
has been through a
variety of processes that
have involved human
activity.
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6. Phases of Economic Activity
There are three phases of economic activity:
Production
Distribution
Consumption.
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Consumption.
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7. Economic Agents
The people, groups or
institutions involved in
the economy are called
economic agents.
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There are three main
types of economic agents:
The family
The company
The state.
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9. All societies need to think about what products they
can make, how they make them and who they will
make them for.
An economic system determines how to produce the
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An economic system determines how to produce the
goods and services in a society.
These systems can be organised in different ways
according to the society’s beliefs and historical
background.
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11. In this system, which is
characteristic of societies with
low levels of development,
people produce what they
need to meet their basic
needs.
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They work the land for food,
build their own houses, make
their own clothes, etc.
Any surplus goods they
happen to produce are sold or
exchanged locally.
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13. The Market Economy
The capitalism (the
market economy) is the
predominant economic
system today.
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It is based on supply and
demand in a free market.
We buy and sell goods
and services in the
market.
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14. Price
The price
depends on the
number of
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number of
products
available and the
number of
buyers.
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16. The Mixed Economy
The mixed economy is a
model that includes elements
of capitalism and the planned
economy.
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In this way, the market
allocates resources but the
state intervenes to regulate
the functioning of the
economy.
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18. In this system, the state owns the means of
production and controls all aspects of the economy.
It decides what and how much is produced.
It also decides how goods will cost and what to do with the
profits.
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profits.
This system was widespread for many decades in the
20th century, but today it only exists in a few states:
China, North Korea and Cuba.
However, it is changing and it is slowly opening up to
the private sector foreign investment.
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19. All countries that declared themselves socialist states under any definition, at some point in
their history, color-coded for the number of years they claimed they were socialist.
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21. Alternative economies reject capitalism because
they say it does not meet the real needs of its
citizens and promotes inequality.
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They suggest a model for society that is based on
solidarity between people, respect for nature and
the common good.
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23. Economic activity describes the different jobs done
by people in order to satisfy society’s needs: the
provision of goods and services.
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25. a) Production
Production provides goods and services for
consumption:
Consumer goods satisfy the desires or needs
of the consumer. Producer goods are used to
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of the consumer. Producer goods are used to
manufacture consumer goods.
The provision of services, such as
healthcare, transport and information.
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There are two types of
distribution:
Wholesale. Wholesalers buy a
large number of products and sell
them to smaller companies.
Fotografía de Marina García López
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them to smaller companies.
Such as Materiales de
Construcción Conchillo in Fiñana.
Retail. Retail businesses buy from
wholesalers and sell them directly
to the public.
Such as Supersol in Fiñana or
Papelería Pruden in Abla. https://www.google.es/maps/
28. c) Consumption
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The last phase of economic activity is consumption.
Consumption is the buying of goods and services.
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30. The three Production Factors
The three elements necessary for producing goods
are:
Natural resources: raw materials used for the
production of goods.
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production of goods.
Labour: people work in companies, the public
administration or for themselves, as self-employed.
Capital: includes all of the resources used to produce
goods or services, physical, human and financial.
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34. Economic agents produce, exchange or
consume products or services.
The three main economic agents are:
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The three main economic agents are:
Families
Companies
The State.
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35. a) Families
Families use their family income (salaries from
jobs) to pay for goods and services.
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37. b) Companies
Companies produce,
market and distribute
goods and services.
The goods have a cost.
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The goods have a cost.
Companies sell goods
for a price that is higher
than their cost.
The difference between
the sale price and the
cost is called profit.
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38. Companies clasification
Companies are
classified
according to their:
size (multinational
companies,
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companies,
medium-sized
companies and
small companies)
activity (primary,
secondary or
tertiary sectors).
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39. c) Public Sector
The public sector
includes all of the
economic and
social activities of
the state.
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the state.
These activities
are paid for with
the taxes from
citizens and
companies.
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41. a) The Job Market
Companies need employees to carry out their
economic activities.
The supply of and the demand for labour form the
basis of the job market.
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42. b) Active Population
The active population is everyone employed in the
production of goods and services, and the people
who are looking for a job.
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43. c) Gender Discrimination
Economic activity varies according to gender. In
general, men have higher positions than women in
all sectors and at every age, and also receive higher
salaries than women.
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44. d) Unemployement
Many companies have reduced costs by automating
their production processes and outsourcing. These
factors have increased unemployment.
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45. e) Trade Unions
Employees can elect representatives or join trade
unions to defend their interests at work.
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46. f) Employers’ Association
Employers also have the right to create
organisations, such as Employers’ Associations, to
defend their interests.
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47. The Social Partners
The social partners are the bodies representing the
two sides of industry: the employers and the
employees.
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