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Principles of Business

Decent Essays

The Development of Economic Activity
Human Beings produce and consume goods and services from the resources in their environment. It is primarily for the reason that humans are called ECONOMIC ANIMAL, because he or she has the ability to use his or her hands and brain to satisfy his or her immediate personal needs. These are looked at as basic needs; these needs are food, shelter and clothing (Economic Activity).
Economic Activity means activities which results in the satisfaction of needs. In order to satisfy these needs, man engaged in certain economic activity such as farming, fishing, hunting, trade form, women stay home.
Direct Production/ Direct Satisfaction of Wants
Direct Production really means that human beings provide all their …show more content…

MAJOR ECONOMIC SYSTEM
Every country is given by an economic system as each system has to decide how to allocate its resources to meet the needs of the citizens. This is a problem because the worlds resources are limited in supply and mans wants are unlimited. The economic is therefore deciding how to best to share these scarce resources. The decision of what to produce or what choices to make from the limited resources available is influenced by the political situation within which the decision is made. In order to share resources all economic must answer to all these problems.
PROBLEMS OF ECONOMIC SYSTEM FACE * Limited Resources * Man wants are unlimited * Scarcity * How to share resources * Choice / decision
No two countries are organized in the same way but they all have to solve three basic problems as follows * What should be produced? * How much to produce? * How is it to be produce? * Where is it to be produce?
There are four different economic systems which answer the foregoing questions. * Subsistence Economy * Free Market Economy {Alternative name – Capitalists, Laissez-faire} * Controlled Economy {Alternative name – Collectivists,

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