Economics
Capitalism
Is based on
Private property
leads to
FIRMS
A firm is a way of organizing production with the following characteristics:
- One or more individuals own a set of capital goods that are used in production.
- They pay wages and salaries to employees.
- They direct the employees (through the managers they also employ) in the production of goods and services.
- The goods and services are the property of the owners.
All of this with the purpose of
Making a profit
By selling goods and services in a
.
MARKET
Are where
Goods and services are transfered from one person to another
Firms compete to have a better product than their competitor
This provokes
New and better technologies and better living standards
Specialization
.
Creative destruction
Is caused when new products or services are invented
And this causes
New technologies to exist
Which might cause
Better Living standards
Automatization
Old technologies to become obsolete
And firms dedicated to these technologies or industries to go into bankruptcy
Might cause
Leading to
Unemployement
Firms sell their goods or services
In order to
Have a profit