Principles of Business
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 needs for themselves and their family without the aid of others; in other words, they do not depend on others to provide.
Indirect Production/ Indirect Satisfaction of Wants
Indirect Production means that human beings exchange their surplus by barter with others; in other words, human beings depend on others to do things for them
Subsistence Economy
Subsistence Economy – An economy which provide just enough to survive, but not to improve their way of life.
BARTER SYSTEM Barter System is the exchange of goods or services for other goods and services without the use of money.
ADVANTAGE OF BARTER SYSTEM * It allowed people to dispose of any surplus, they had at the same time obtain a variety of things they needed. * It enables persons to enjoy goods and services they could not produce. * Countries with foreign currency problems can get goods and services that they require. * Countries that engage in trade can strengthen their political and cultural ties.
DISADVANTAGE OF BARTER SYSTEM * Double or co-incidence of wants – No trade can take place unless there is double or co-incidence of wants; that is your trading partner has what you want and wants what you have. * Time Consumption – It could
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 needs for themselves and their family without the aid of others; in other words, they do not depend on others to provide.
Indirect Production/ Indirect Satisfaction of Wants
Indirect Production means that human beings exchange their surplus by barter with others; in other words, human beings depend on others to do things for them
Subsistence Economy
Subsistence Economy – An economy which provide just enough to survive, but not to improve their way of life.
BARTER SYSTEM Barter System is the exchange of goods or services for other goods and services without the use of money.
ADVANTAGE OF BARTER SYSTEM * It allowed people to dispose of any surplus, they had at the same time obtain a variety of things they needed. * It enables persons to enjoy goods and services they could not produce. * Countries with foreign currency problems can get goods and services that they require. * Countries that engage in trade can strengthen their political and cultural ties.
DISADVANTAGE OF BARTER SYSTEM * Double or co-incidence of wants – No trade can take place unless there is double or co-incidence of wants; that is your trading partner has what you want and wants what you have. * Time Consumption – It could