1. The market economy

2. Economy: The economy is responsible for the use or administration of resources which satisfy the needs of society in the form of:
- goods: Material objects (food, car...)
- services: transport, education, healthcare...
All of them have a price.
Factors of production: are the resources used to produce goods and services.
- Natural resources: wood, water, minerals...
- Human resources: people and their labour.
- Capital resources : money, buildings, machines....

3. Factors of production Capital Human resources Natural resources Money
Machines
workers
Raw materials
Products

4. Market economy. Supply and demand
In market economies people and companies produce, buy and sell goods freely with a limited involvement of the state.
The factors of production belong to individuals and businesses.
The market is the method to exchange goods and services.
Supply and demand determine the prices.
- If the supply of a product is high the price goes down.
- If the supply of a product is low the price goes up.

5. Supply and demand

6. Economic agents Families State Business (companies) Colect taxes
Provide
Provides
Provides
Provide
Salaries
Workers and capital
Create
demand
Services
Infrastructures
Goods
Provide
Incomes or
profits

7. Labour market
In a capitalist economy workers are subjet to the market laws,
specially supply and demand.They are the labour market.
Supply is the people who want to work.
Demand is the number of workers that companies need.
Labour market is changing:
Unemploiment is rising due to new technologies and relocation.
ICT increase the teleworking.
Companies demand flexibility to workers and workers
demand better labour conditions using trade unions and
colective agreements.

8. Globalization of economy
Today world's economies are interconnected and form part of an enormous free market system. This is globalization which has the following characters:
ICT allows companies all over the world to be in contact.
The expansion of multinationals and the relocation of industries.
Free trade zones and common markets, to make easy and cheap the exchanges. UN promote the free trade between its members.