Please enable JavaScript.
Coggle requires JavaScript to display documents.
Human needs and production - Coggle Diagram
Human needs and production
Economic agents
The main economic agents
Businesses
Employ labour to produce goods and services
Meet the needs of households and the government
Receive money when the other two agents spend it
The government
Produces and uses goods and services such as healthcare products to give to public hospitals
Produces goods and services that benefit the general public such as schools
Collects taxes from households and businesses to pay for these services
Households
Meet their needs by using the goods and services offered by businesses and the government
Supply labour when they work for them
Receive a financial remuneration, which they spend to meet their needs
The purpose of economic activity
To meet human material needs through the production of goods and services
The main economic activities
Distribution
Transporting goods from the producer to the consumer
Transportation of food from farms to shops
Production
Creation of goods and services
Food produced by a farmer
Consumption
Using the goods and services produced
When a household consumes food.
Need in economics
It covers everything from primary needs, such as housing
To secondary needs, such as mobile phones. Meeting a need usually involves creating a new need.
For example
Buying a car creates the need to take it regularly to a garage for repairs
Factors of poduction
Are the resources involved in producing goods and services
Capital
Is made up of the different elements involved in the production process
Human capital
The labour that workers contribute
Physical capital
Raw materials, facilities, tools and machinery, etc
Financial capital
The money needed to pay for physical capital and human capital
Labour
Is a concept that includes both physical and intellectual labour
Can be carried out using different types of technology
The role of labour is to produce goods or provide services
A wage or salary is the payment
Natural resources
Raw materials found in nature. Used in the consumption or manufacturing of products. Can be regenerated
NON-RENEWABLE RESOURCES
Regenerate more slowly than they are consumed. Their capacity to renew themselves is low
RENEWABLE RESOURCES
Can be consumed without being exhausted, because they regenerate faster than they are consumed
Purchasing power
The amount of goods or services that an amount of money can buy
The purchasing power of a wage or salary depends on the cost of living. If a wage or salary goes up, but the prices of goods and services increase even more, purchasing power decreases.