The Capitalism by Pedro Iturbide and Carlos Gonzalez
Important words and definitions
Varieties of Capitalism
Important aspects to understand about capitalism
what brought the industrial revolution?
GDP per capita: Is the average income of people in a country.
Capitalism: The capitalism is a economic system were a combination of institutions occurs. This Intitutions protect private property which are; firms, markets, etc. Like for example, a patent is a institution.
Absolute advantage: when we are the competion in the market and I produce more and have and absolute advantage and monopoly over the other market.
Comparative advantage: Competition of the comparison of two market. And they are better at some things than other buissnesess.
Decentralization: The power of the owner and other owners ( they fight with each other). You cant control the market so that means
Centralization: Managing all the power to one person and they compete with more buisnesess they don’t control the market
The institutions interact in different ways (laws)
Private property means that you own things, you can use and dispose of them the way you want and exclude others. The concept of private property has changed over the year.
Markets are a means of transferring goods or services from one person to another. They connect people that are looking for mutual benefit. It is important to understand that they are reciprocal and voluntary. Collaboration and competition is important.
Firms better know as companies like restaurants, banks, schools etc. Firms created a new type of boom labour market where the head gears demand employes to labour.
exponential growth in productivity (due to technology that allows us to produce more working less)
By measure using Gross Domestic Product or GDP service a country produced during a year.
Income has increased that the standard of living because well-being is more than just money.
system has increased and it crated advantages and disadvantages
gross domestic product per capita
connectivity of the various parts of the world
productivity of labor
the impact of the economy on the global environment ( Climate change)
There are some countries that are more poor than others because capitalism has its varieties, or it is not a unique economic system, there are differences in how these three institutions are organized or related to each other.
Firms are the central part of the capitalist system because that is the place where production happens.
Output (capital goods, like buildings, equipment, patents)
input (goods and services produced)
The firms are used to sell these goods and services to different customers to make a profit.
Capitalism is an economic system that combines centralization with decentralization.
This limits the powers of owners and of other individuals because they face competition to buy and sell in markets.