WHAT IS AN ECONOMIC ACTIVITY?

❏ An economic activity is any activity that uses several and

different types of RESOURCES to obtain a PRODUCT or
SERVICE, which have a VALUE.

❏ An economic activity normally involves MONEY. People give money

as an exchange of the product or service.

❏ Economy deals with the use of resources which satisfy the

NEEDS of individuals and groups.
ECONOMIC CONCEPTS

❏ GOODS/PRODUCTS AND SERVICES

❏ FACTORS OF PRODUCTION
❏ ECONOMIC AGENTS
❏ SUPPLY AND DEMAND
❏ ECONOMIC SECTORS
❏ LABOR MARKET AND UNEMPLOYMENT
KEY WORDS

INCOME

SALARY

INVESTMENT

PROFIT (FALSE FRIENDS BENEFICI -BENEFIT)

BUDGET

EXPENSES
GOODS AND SERVICES
FACTORS OF PRODUCTION
Factors of production are all the elements people need to produce something,
either a p_ _ _ _ _ _ or a s_ _ _ _ _ _.

● NATURAL RESOURCES (land, energy and raw materials)

● HUMAN RESOURCES (labor )
● CAPITAL (money, machinery)
● KNOWLEDGE & ENTERPRISE
NATURAL RESOURCES
Think in which ways production and economic activity effects natural
resources and environment.
ECONOMIC AGENTS

WHO TAKES PART IN A ECONOMIC ACTIVITY? WHO ARE THE

ECONOMIC AGENTS?
Who produces goods, such as wheat or cotton or a car?
Who distribute these goods and sell them in shops or supermarkets or
through webpages?
Who provides services such as a flight to NY?
Who pays for a service? Who buys a good?
Who establishes prices and economic rules?
1. COMPANIES AND
BUSINESSES

BIG COMPANIES SMALL BUSINESSES

COMPANIES AND BUSINESSES.
1. THEY PRODUCE GOODS AND SERVICES.
2. THEY SELL AND GET A PROFIT.
3. THEY HIRE WORKERS AND GIVE THEM A JOB
AND A SALARY.
4. THEY PAY TAXES TO THE STATE.
2. FAMILIES
FAMILIES (PEOPLE)

1. THEY CONSUME GOODS AND SERVICES.

2. THEY WORK AND GET A SALARY.
3. THEY PAY TAXES TO THE STATE.
3. THE STATE
THE STATE

1. THE STATE COLLECTS TAXES FROM

COMPANIES AND FAMILIES.
2. WITH THE TAXES PROVIDES SERVICES
(HEALTH, EDUCATION, SOCIAL BENEFITS,
INFRASTRUCTURES, EQUIPMENTS, ETC..)
3. THE STATE ALSO MAKE LAWS TO
REGULATE LABOR MARKET.
SUPPLY AND DEMAND
KEY WORDS

price
supply
demand
go up - rise - increase
go down - fall - decrease
shortage: escassetat
surplus: excedent
HOW DOES THE LAW OF SUPPLY AND DEMAND WORK?

In a market economy, PRICES are determined by two factor:

❏ SUPPLY which is the number of products and services available.

❏ DEMAND which is the number of products and services that consumers want to buy.

Supply and demand shows how producers and consumers interact with each other.
● If the demand increases, and the supply remains the same, there will be a shortage, and the price
will increase.
● If the demand decreases, and the supply remains the same, there will be a surplus, and the price
will go down.
● If the supply increases, and the demand remains the same, there will be a surplus, and the price will
go down.
● If the supply decreases, and the demand remains the same, there will be a shortage, and the price
will increase.
ECONOMIC SECTORS: PRIMARY SECTOR
The primary sector comprises
businesses that produce or collect
natural resources.

This includes agriculture, livestock,

fishing and forestry.
ECONOMIC SECTORS: SECONDARY SECTOR
Activities in the secondary sector
process raw materials into finished
products.

Includes all the industries (textile,

chemical, etc.) and construction.
It also includes mining and energy
industries.
● depending on the book , mining is
considered to be an activity of the
primary sector
ECONOMIC SECTORS: TERTIARY SECTOR
the tertiary sector comprises service
providers, including:

retail sales

transportation

insurance companies

restaurants

tourism

entertainment

legal services,

health care,

and financial services.

ECONOMIC SECTORS: QUATERNARY SECTOR
The quaternary sector includes businesses
related to intellectual activities, such as
education, government decision-making and
research and development.
Distribution of population by economic sectors
In
Reasons for the growth of Tertiary ector in Europe and developed countries:

1. Mechanisation of Farming and Industry: les workers are needed to get

the same amount of food and products.
2. Globalisation: many products are produced in less developed countries
where salaries are lower.
3. New technologies: with new technologies, new economic activities and
jobs have develop (ex. jobs related to internet, computers, mobile
phones, gaming, etc).
4. Higher incomes and more leisure time have result in new demand of
services such tourism and traveling.
LABOR MARKET AND UNEMPLOYMENT
KEY WORDS
employment retirement

unemployment benefit

unemployed to hire

employer to fire

employee to search/look for a job

job offer
self-employed (autònom)
Active and Inactive Population
The labor market is formed by the employers (big and small companies and
businesses and the state) and the active population.

❏ Active Population: all people over 16 years old that are able to work.
Includes: a) people that are working b) unemployed people who look for a
job c) self employed people.
❏ Inactive Population: children under 16, people who are already retired
and people who can’t work due to a health problem. Students over 16 are
also considered to be inactive population if they don’t work.
Unemployment rate
The unemployment rate refers to the percentage of active population who
don’t have a job. In Catalan is called taxa d’atur o taxa de desocupació

The rate of unemployment is always higher among young people under 25

years old.
CAUSES of Youth Unemployment
SOME CAUSES OF HIGH YOUTH UNEMPLOYMENT RATES IN SPAIN:

1. Young people generally have less work experience, less knowledge about how to find a
job and fewer contacts to get jobs.

2. Most young people in Spain work under temporary contracts.

3. There is a mismatch of supply and demand between work and education level.

4. There is a high rate of school dropouts, which is the percentage of the population
between 18 and 24 years old who has not completed secondary education and who has
not taken part in any technical training.