Question

How did you participate in economics during the past week?

Answer 1

This week I participated in the economy through buying and selling. At the beginning of the week, I was trying to decide between a book and some new music, and I chose the book. I also worked at a coffee shop. These activities are part of economics because I was a consumer when I decided, based on opportunity cost, to buy something. When I worked, I was a producer. As both a producer and a consumer, I involved myself in the economy

Answer 2

The three economic agents are households, firms and the public sector. In the economy I participate as a household, with two different roles:

• Consumer: I demand and purchase goods and services in the markets to satisfy my needs. In exchange for them I pay a price that will contribute to enhance the income of its producer.
• Owner of factors of production: In exchange for the factors of production (land, labor, capital) that I offer in the markets, I obtain retributions. For example, in exchange of my labor effort I receive a salary, which is my main source of income and what allows me to afford the goods I purchase as a consumer.