PM/02Business Activity in Contemporary Society1 WANTS AND NEEDS A person’s NEEDS are limited - FOOD CLOTHING SHELTER A person’s WANTS are unlimited - CAR MOBILE PHONE HOLIDAY NEW CLOTHES ENTERTAINMENT

PM/02Business Activity in Contemporary Society2 BUSINESS ACTIVITY Business activity provides us with goods and services to satisfy our wants

PM/02Business Activity in Contemporary Society3 GOODS GOODS are things which you can see and touch. DURABLE goods are goods which we use again and again, eg, computer. NON-DURABLE goods are things we normally use only once, eg, food, newspaper but we buy regularly

PM/02Business Activity in Contemporary Society4 SERVICES Services are things which are done for us, eg, banking, education, transport

PM/02Business Activity in Contemporary Society5 Copy this table into your jotter and complete by writing down 6 of your WANTS. State whether they are goods (durable or non-durable) or services. 

PM/02Business Activity in Contemporary Society6 BUSINESS ACTIVITY INPUTS Resources OUTPUTS Goods/Services PROCESS In order to produce goods and services (OUTPUTS), a business needs to use resources (INPUTS) For example Materials Labour For example Trainers Meal in restaurant

PM/02Business Activity in Contemporary Society7 FACTORS OF PRODUCTION LAND LABOUR CAPITAL ENTERPRISE The resources a business uses are called the FACTORS OF PRODUCTION.

PM/02Business Activity in Contemporary Society8 LAND The factor of production called LAND refers to all natural resources for example, –oil –coal –water –forests as well as land itself –

PM/02Business Activity in Contemporary Society9 LABOUR The factor of production called labour refers to the human resources used in the organisation. For example, –sales persons –accountants –cleaners –machinists

PM/02Business Activity in Contemporary Society10 CAPITAL The factor of production called capital refers to –all the man made resources owned by the business, such as, factory tools equipment machinery vehicles –the finance invested in the business

PM/02Business Activity in Contemporary Society11 ENTERPRISE The ability of the owner or manager of a business to use the other factors of production - land, labour and capital - effectively. LAND LABOUR CAPITAL

Herr Kutt opened a hairdressing and beauty salon business with £3,000 from his savings and a bank loan of £2,000 He found premises in the High Street which had land at the back he could use as a customer car park. He fitted out the salon with furniture and equipment and ensured he had a good supply of water for washing. He employed Liam and Linda as stylists, Lisa as a junior, Luke as a receptionist and Lauren as a beautician. Copy out the table below and complete showing Herr Kutt’s factors of production. One has been done for you. 

PM/02Business Activity in Contemporary Society13 THE BUSINESS CYCLE and WEALTH CREATION Business produces goods and services to meet the never ending wants of consumers Consumers buy goods and services to obtain the things they want Wealth is created for businesses and their employees Consumers have money from their wages to spend on other goods and services

PM/02Business Activity in Contemporary Society14 BUSINESS CYCLE CYCLE OF BUSINESS The continual flow of money from around the economy CONSUMERS People who use a product or a service (may not be the buyer) PRODUCTIONThe making of a product or the provision of a service CONSUMPTION The using up of goods and services PRODUCERSBusiness organisations who make a product or service

PM/02Business Activity in Contemporary Society15  Answer the following questions in your jotter 1 What is the difference between needs and wants? Give examples. 2 If we only had needs rather than wants, why would there be very limited business activity? 3. Identify and Describe the 4 factors of production. Which do you think is the most important? Justify your answer. 4 Explain how the cycle of business creates wealth. 5 Which of the following jobs create wealth? Teacher; Doctor; Miner; Baker; Accountant; Jewellery Designer

PM/02Business Activity in Contemporary Society16 SECTORS OF ACTIVITY/INDUSTRY Businesses can be grouped into sectors according to the types of products or services they provide. These sectors are called –PRIMARY –SECONDARY –TERTIARY

PM/02Business Activity in Contemporary Society17 PRIMARY SECTOR Businesses involved in exploiting natural resources FORESTRYFARMINGMINING OIL EXCAVATION

PM/02Business Activity in Contemporary Society18 SECONDARY SECTOR Businesses involved in manufacturing and construction Taking natural resources and changing them into things we can use Clothing manufacture Shipbuilding Car manufacture

PM/02Business Activity in Contemporary Society19 TERTIARY SECTOR Businesses which provide a service, eg BANKINGBARBERSHOTEL

Copy this table into your jotter and complete showing which of the following organisations are involved in Primary, Secondary and Tertiary activities 

PM/02Business Activity in Contemporary Society21 All countries are heavily involved in primary sector activities at first As their economies grow they become industrialised and become more involved in secondary industries In the last 30 years the UK has lost many of its traditional industries (de-industrialisation) In the UK there has been a significant growth in service industries Changes in Industrial Activity

PM/02Business Activity in Contemporary Society22 QUESTIONS Identify and describe each of the 3 sectors of economic activity? Identify 3 examples of activity for each sector. Can you think of ways in which Shell Oil could be involved in all 3 sectors of economic activity?

PM/02Business Activity in Contemporary Society23 Design a poster explaining the 3 sectors of business activity