In order to develop what is meant by the Economic Revolution and its roles in the remaining chapters of the book, a few definitions will prove helpful:
Economics: The study of the ways in which human beings make a living; the study of human wants and their satisfaction; the science of wealth.
Economic System: The rules, laws, customs, and principles which govern the operation of an economy. Each economic system has its own peculiar problems and therefore produces its own solutions.
Economic Activity: All action concerned with the creation and distribution of goods and services.
Consumption: The process by which goods and services are utilized in satisfying human needs and wants.
Production: The process of creating goods or services to be consumed.
Distribution
a. Physical: The process of transporting these goods and services to the people who need or want to consume
them.
b. Personal: The division of income among persons.
c. Functional: The categorization of income according to type — wages, rent, interest, and profit.
Basic Agents of Production of the Market System
Land: Natural resources.
Labor: Human effort.
Capital: The physical necessities for production — buildings, machinery, tools, equipment, and supplies.
