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01 HUMAN NEEDS AND PRODUCTION - Coggle Diagram
01 HUMAN NEEDS AND PRODUCTION
The economic activity based on meeting human needs through the production of goods and services
Production
Creation of goods and services
Distribution
Transporting goods from producers to costumers
Consumption
Using the goods and services produced
Need in economies:
Primary needs such as housing
Secondary needs such as mobile phones
1 ECONOMIC AGENTS
The economic agents:
Households
Meet their needs by using the goods and services offered by business and government
Business
Employ labour to produce goods and services
The government
Produces and uses goods and services, such as healthcare products to give to public hospitals
2 FACTORS OF PRODUCTION: Natural rsources, capital and labour
NATURAL RESOURCES: Raw materials found in nature
Renewable resources. Water and wind can be consumed without being exhausted because they regenenerate faster than they are consumed
Non-renewable resources: Regenerate more slowly tan they are consumed
CAPITAL: Involved in the production process
Human capital. The labour that workers contribute
Physical capital: Raw materials, facilities, tools and machinery
Financial capital: The money needed to pay for physical capital and human capital
LABOUR: The role of labour is to produce goods or provide services to receive financial compensation
PURCHASING POWER: The amount of goods or services that an amount of money can buy