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1.1 Human needs and production - Coggle Diagram
1.1 Human needs and production
Economic activity
Is to meet human material needs through the production of goods and services
The main economic activities
Distribution
It's the transportation of goods from the producer to the consumer
Consumption
Is based on using the goods and services
Production
It's the creation of goods and services
Economic agents
Households
They use the goods and services ofered by businesses and the government
Businesses
They employ labour to produce goods and services
For meeting the needs of households and the government
Government
Produces and uses goods and services, such as healthcare products
They produce goods and services that benefit general public
They collect taxes
Factors of production
Are the resources involved in producing goods and services
Natural resources
Are raw materials found in nature
2 types
Renewable resources
Can be consumed without being exhausted
They regenerate faster than they are consumed
Non-renewable resources
They regenerate slower than they are consumed
Their capacity to regenerate is low
Capital
Capital is made up of the different elements involved in the production process
3 types
Physical capital
This are raw materials, facilities, tools and machinery...
Financial capital
Is the money needed to pay for physical capital and human capital
Human capital
Is the labour that workers contribute
Labour
Is a concept that includes both physical and intellectual labour
The role of labour is to produce goods or provide services to receive financial compensation
A wage or salary is the payment which employees receive for their labour
Purchasing power
Is the amount of goods or services that an amount of money can buy
