1. BASIC ECONOMIC CONCEPTS

1. Production: it is the transformation of raw materials to finish good. It can be divided into 3 groups.

-primary production: extraction

-secondary production: manufacture stage

-territory production: distribution

      In economic it is said that production is not complete unit it reaches the final consumer or final stages.

      Before the 18 th century, production was done in hands or with the emergence of the industrial revolution. The revolution of the industries changes hands to machines.

       The good produce can be divide into two groups: consumer good and producer good

• consumer good are good which are created to satisfy human need.
• Producer good are good which are produced to satisfied human need directly. They are also sub-divided into two groups: durable consumer good and non-durable consumer goods. While producer good which are produce other goods.

There are three manufactories of production: Land, Labour, Capital. Two types capital fixed capital and circulated capital.

2. DISTRUBUTION: it refers to the transferring of product from where it is produced and from where it is consumer. This is the process of passing on a finished product from its manufacturing to its place of consumption. Wholesaler and retailers are the main actors in the distribution chain. The wholesalers buy from producers in bulk and sell these goods to the retailer who in turn break them down into smaller affordable units for the consumer to buy. The process of distribution start from the manufacturer.

• THE DIFFERENT STAGE OF DISTRIBUTION

c. CONSUMPTION: it is constituted to the actual buying of a product and putting it to use. It is the use of resources to satisfy human wants. Goods and services produced must be used up or consumed. In fact, consumption is the end product of the production chain and underlies the purpose for which production is intended to achieve. The level of consumption depends very much on the level of income of the consumers.

Two types of consumption exist:  private and public consumption.

FACTORS THAT INFLUENCE CONSUMPTION

• LEVEL OF INCOMES
• LEVEL OF TAXATION
• CHANGES IN INTEREST RATE
• EXCHANGE: it refers to the buying and selling of goods

The oddest form of exchange of good is known as trade by batter. The difficulties countered during trade by batter used to the creation of money.