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HUMAN NEEDS AND PRODUCTION - Coggle Diagram
HUMAN NEEDS AND PRODUCTION
The purpose of economic activities is to meet human material needs trough production of goods and services.
Distribution
Transporting goods from producer to customer such as the transportation of food from farms to shop
Consumption
Use the goods and services produced, such as, when households consumes food.
Production
Is the creation of goods and services such as, food produced by a farmer
Economic Agents
Businesses
Employs labour to produce goods and services
They do it to meet needs of households and government
And receives money when the other two agents spend it
The government
And also produce it for the general public, such as, schools
To pay this services they take taxes from households and businesses
Produce and use goods and services, such as, helthcare products to give to public hospitals
Households
Using the goods and services households meet their needs by the businesses and the government
Household supply labour when they work for them
And receive a final remuneration
Factors of Production
Natural Recources
Are row materials found in nature
They are used in the consumption or in the manufacturing of products, as energy sources.
Renewable resources
Can be consumed without being finished, because they regenerate faster than they are consumed.
Some can be almost limitless, such as water and wind, but others need a period of time to regenerate, such as flora and fauna.
Non-Renewable resources
Regenerate more slowly than they are consumed.
Their capacity to renew themselves is low, and, as a result, they can run out if we overconsume them (Oil, coal and iron core)
Are the resources that producing goods and services: Natural resources, capital and labour
Capital
Is made up by 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
Labour can be carried out using different types of technology, tools and machines
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. And counts the amount of goods they can purchase.