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Review Acivities Unit 1

The document explains key economic concepts such as labour, production costs, profit, import duty, and the welfare state. It outlines the three main economic sectors: primary (raw materials), secondary (manufacturing), and tertiary (services), as well as the four production factors, emphasizing natural resources and labour. Additionally, it contrasts capitalism, characterized by free market principles and minimal state intervention, with communism, where the state controls production and distribution.

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7 views3 pages

Review Acivities Unit 1

The document explains key economic concepts such as labour, production costs, profit, import duty, and the welfare state. It outlines the three main economic sectors: primary (raw materials), secondary (manufacturing), and tertiary (services), as well as the four production factors, emphasizing natural resources and labour. Additionally, it contrasts capitalism, characterized by free market principles and minimal state intervention, with communism, where the state controls production and distribution.

Uploaded by

gimnasticoamin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Review Activities Unit 1

1. Explain these concepts: (2 points)

• a) Labour = The contribution of people to the production process. It depends primarily on the workers
dedication, training, the means at their disposal and their experience.
• b) Production costs = Production costs are determinated by the value of the production factors and
may be direct or indirect.
• c) Profit = The money generated when a product or service is sold for more than its poduction cost.
• d) Import duty = A tax placed on goods placed from one country to another.
• e) Welfare state = The state intervenes in economic matters by regulating the market during crises and
reducing social inequalities through taxes and subsidies.

2. Name the 3 main economic sectors and explain each one.

• Primary sector: This involves the extraction or collection of raw materials from nature, this includes
arable farming, livestock farming, fishing and forestry.
• Secondary sector: This sector transforms raw materials into goods. It comprises the industrial
process that uses the resources provided by the primary sector. Activities related to energy,
construction and industry.
• Tertiary sector: This sector provides services to satisfy people’s needs. For this reason it is called the
services sector. Include teaching, transport, trade, tourism.

3. Name the 4 production factors and explain two of them.

Goods and services require basic resources. These are known as production factors: natural resources,
labour, capital, tecnology and knowledge

-Natural resources, they include:

• Raw materials, for producing other goods


• Energy sources, which generate power needed to operate factory machinary and the means of
transport for distributing goods.

-Labour: The contribution of people to the production process. It depends primarly on the workers'
dedication, training, the means at their disposal and their experience.

4. What are the different economic agents? Define one that you prefer.

Economic agents (people, companies and state) play a key role in production and distribution

Companies: They produce and distribute goods and employ people

5. What are the main characteristics of capitalism?

It’s main characteristics are:

• Prices are regulated through supply and demand


• Free initiative to create companies and the private ownership
• Economic agents are free to operate and establish relations. In doing so, companies strive to
maximize profits, and people strive to satisfy their needs. While the state must ensure social wellbeing,
it should intervene as little as possible in economic matters
• Free competition
• Overproduction crises, which occur when the supply grows faster than the demand
6. What are the main characteristics of communism?

In this system, the state controls the other economic actors and owns most means of production and
distribution. The government therefore determines which goods should be produced, in which amount, their
sale price and the workers' wages. Everything is regulated according to a central plan with which the
economic agents must comply.
This economic model all but disappeared after the fall of the communist bloc in the late 20 th century. Today, it
remains in place in certain isolated countries (e.g. Cuba and North Korea), while China has a mixed economy
that combines communism and capitalism.

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