Economy and Economic Activity

ECONOMY AND ECONOMIC ACTIVITYMaría Jesús Campos Fernández. learningfromgeography.wikispaces.com

Economy and Economics Economy: How a society`s resources are shared, the way

in which goods and services are produced, distributed and consumed.

Economics: Science that studies how a society`s resources are shared, the way in which goods and services are produced, distributed and consumed.

It comes from the Ancient Greek “oikos” which means household, and “nomos” which means rule.

Economics studies how people and societies make decisions in order to obtain goods and resources.

This decisions are necessary because resources are limited and sometimes even scarce.

Supply

Demand

The Classical economic analysis assumes that if demand increases faster than supply, the prices will rise and the firms will respond by increasing the supply.

Currently, economists have created a branch called macroeconomics as they find out that when economy affects states or even continents it is not only affected by the supply and demand law.

Microeconomics: focuses on the economy of individuals, households, small shops…

Macroeconomics: focuses on the economy of an autonomous community, state, a continent…

Economic

Activity

Economic Goods

Products Services

Factors of Production

Natural Resourc

esHuman

Resources

Capital

Economic Agents

People and Families

Companies

The State

Economic

Sectors

Primary Sector

Secondary Sector

Tertiary Sector

Economic Goods Products are things we can buy that we can use or

touch (clothes, car, machinery, computers…) Services are things we buy that we can not touch,

is something that someone does for us (a haircut, assistance from a doctor, teach you geography…)

Economic Goods

Composition

Consumable

Capital goods

Function

Intermediate Finished

Ownership

Private Public

Factors of Production

Economic Agents

The Economic Sectors

Subsistence Economy

Self-consumpti

on

Little mechanisatio

n

Less developed countries

Communist or Planned EconomyPlanned by

the State (collective

benefit)

Centralised

The State owns the means of

production and the

production

Capitalist or Market System

Law of supply and demand

Private property means of

productionFreedom to

work and hire

Little State intervention

The Economic Systems in the World

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