DOMESTIC WORK
Any unpaid work done at
home is not counted as part
of the economy. Housework,
for example, only contributes
to the market economy if a
cleaner is paid for the job.PRODUCTION
Every country uses its raw
materials and its people
to make all kinds of products
to sell. The best ways to
maximize profit are to
reduce production costs,
pay the workforce less,
and use the speediest
manufacturing tools.
As production increases,
so the economy grows.TRADITIONAL ECONOMY
In less wealthy countries, a traditional economy
is more common. People produce a few goods
for themselves and sell what is left. Rural
farmers may grow produce
such as fruit and vegetables
to feed their families, and
then sell the rest at
local markets.Economy
212
SUPPLY AND DEMAND
An economy works because there are people
supplying goods and services to people who
will pay for them. When there is a big demand,
the price of these goods and services goes up,
but if there is a huge supply, the prices drop
to encourage the demand.Since ancient times, farmers
have taken goods to markets,
where customers bartered over
prices and sales were agreed.
Today the range of goods is
massive, but the principles
remain the same. Societies
function by people working
together to grow, build,
manufacture, or
distribute products
for consumers
who want them.
Such a system,
for the production,
distribution, and
consumption of
goods, is called
an economy.These umbrellas for
toes might seem
useless, but if there
is a demand, then
a supply will follow212_213_Economy.indd 212 10/01/19 2:26 PM