HOW DO WE FEED?
During thousand of years, in the Paleolithic, our ancestors got everything they needed to feed themselves through hunting and gathering. However, about 8000 b.C. the first human groups that used other means to survive appeared: the agriculture and animal husbandry. These new methods were gradually extended, so in the Mediterranean area in the 2nd century A.D. there were no hunter-gatherer societies left-
Why not to hunt?
In scientific terms, agriculture, animal husbandry, fishing (and forestry activities) are included in the Primary Sector of the economy. But watch out, only the economic activities will be taken into account in the GDP, National Accounts, etc.
What do we mean with "economic activities"?
Imagine that you have a plot of land where you grow tomatoes. Your cousin has a similar plot as yours, and she also grows tomatoes. When harvest season begins, she gives the tomatoes to her family. But you sell them instead.
- What is the difference between what your cousin does and what you do?
- With what you know now, write an operational definition of "economic activities".
If you do not know how to write definitions, see section TECHNIQUES.
In the capitalist economic systems (or "market economies"), under a perfect competence situation, prices are adjusted by means of the well-known law of supply and demand. In fact, this flashy name describes a simple process. Let's see it!
My cousin's tomatoes.
Following the previous example, imagine it is the harvest season of tomatoes. You sell your tomatoes for 2€ per Kg at the market.You get a profit of 1,50 per Kg. (after deducting expenses derived from production: water, fertilizer, etc.)
But your cousin is tired of giving tomatoes to her family. Now she also sells them at the market for 1€ per Kg.
- If you want to keep on selling your tomatoes, what will you have to do?
Imagine your brother-in-law also has a plot of land. He goes to the market with his production, but he sells them for 75 cts per Kg.
- What will you and your cousin have to do?
Competence.
Supply and demand.
- In whatever market, who are "the supply"? and who are "the demand?
- Explain how the price of a certain product is established in the market
- With what you know now, explain the "law of supply and demand".
Oligopolies and dumping.
-Imagine you have lots of tomatoes, more than your cousin and brother-in-law. If you want to bankrupt your cousin and brother-in-law and throw them out of the market in order to remain alone, what could you do (not involving violence)?
-Well, let us not be so dramatic. Imagine you get on well with them. If your cousin, your brother-in-law and you are the only ones who sell tomatoes at the market, what could you three do to earn more money?
Considering the first question, write an operational definition of dumping. Considering the second, write an operational definition of oligopoly.