Grade 10, Week 1 and 2, Unit 11 Grade 10, Unit 1, The Purpose of Business Activity

Grade 10, Week 1 and 2, Unit 12 Business produce goods and services. Goods: Tangible products that can be touched and consumed. Services: Things other people or businesses do for you.

Grade 10, Week 1 and 2, Unit 13 Scarcity, Choice and the Allocation of Resources Supply is limited. Resources are limited. Resources are scarce, a choice must be made as to what to produce.

Grade 10, Week 1 and 2, Unit 14 Needs and Wants Need: Something necessary to sustain life. Want: Something chosen to satisfy a need or to make life more enjoyable.

Grade 10, Week 1 and 2, Unit 15 The Economic Problem: Needs And Wants A need: Is a good or service essential for living. A want: Is a good or service which people would like to have, but which is not essential for living. People’s wants are unlimited.

Grade 10, Week 1 and 2, Unit 16 Needs and Wants (continued) Needs Food Clothing Shelter

Grade 10, Week 1 and 2, Unit 17 Needs and Wants (continued) Need: Food Wants PizzaHamburger

Grade 10, Week 1 and 2, Unit 18 The Economic Problem: Needs And Wants (continued) The real cause of the economic problem Unlimited Wants Limited Resources Scarcity Plus Equals

Grade 10, Week 1 and 2, Unit 19 The Economic Problem: Needs And Wants (continued) Limited resources, such as: - Land, (fields, forests, oil, gas, metals). - Labour, (people). - Capital, (finance, machinery, equipment). - Enterprise. (The skill).

Grade 10, Week 1 and 2, Unit 110 Demand and Effective Demand When you want something, you create a demand for it. Effective demand: Demand for a product that is backed up by an ability and willingness to pay for it.

Grade 10, Week 1 and 2, Unit 111 Allocating Resources Satisfying our wants from scarce resources involves a choice.

Grade 10, Week 1 and 2, Unit 112 Cost and Opportunity Cost Opportunity cost: The cost of one item in terms of the next best alternative that must be foregone.

Grade 10, Week 1 and 2, Unit 113 Limited Resources: The Need To Choose Examples of opportunity cost: - Individual, (Holiday or car?) The individual chooses to buy the holiday, so the car becomes the opportunity cost.

Grade 10, Week 1 and 2, Unit 114 Limited Resources: The Need To Choose (continued) Examples of opportunity cost: - Business, (Machine A or machine B?) The company decides to buy machine A, so machine B becomes the opportunity cost.

Grade 10, Week 1 and 2, Unit 115 Making The Best Use of Limited Resources: Specialisation Use the resources in the most efficient way possible. Specialisation: Where resources are used to concentrate on producing one particular product.

Grade 10, Week 1 and 2, Unit 116 Exchange in Early Societies Exchange: The ability to exchange one type of goods or services for another, normally using money as a means of exchange. Specialisation: The tendency of an individual, business, region or country to produce certain goods or services.

Grade 10, Week 1 and 2, Unit 117 The Development of Firms and the Division of Labor Firms and the division of labour growth. Firm or business is able to specialise in one type of good or service. The employees can specialise in one type of activity (such as accountancy, operating computer).

Grade 10, Week 1 and 2, Unit 118 The Development of Firms and the Division of Labor Division of labour: - Each worker does one specialised job. - When the production process is split up into different tasks and each worker performs of one these tasks. Ex: In a computer assembly factory, each worker will perform a specialist task.

Grade 10, Week 1 and 2, Unit 119 The Development of Firms and the Division of Labor Division of labour: - Advantages: ** Increase efficiency and output. - Disadvantages: ** Workers can become bored, efficiency might fall. ** If one worker is absent and no one else can do the job, production might be stopped.

Grade 10, Week 1 and 2, Unit 120 Business Objectives Business objectives: Are the aims or targets that a business works towards. Most common business objectives are: - To make profit. - To increase added value. - To expand the business. - To achieve business survival. - To provide a service to the community.

Grade 10, Week 1 and 2, Unit 121 Business Objectives Value added: The difference between the selling price of a product or service and the cost of bought in materials and components. Value added is not the same as profit. Example: The selling price of a newly built house is $ The value of the bought in bricks, cement, wood, and other materials was $ The value added by the builder is $ 85000, but this is not the builder’s profit as so many other costs and expensed have to be taken into account too.

Grade 10, Week 1 and 2, Unit 122 International and Regional Specialisation Geographical, geological and climate factors make some areas of the world more suitable than others for the production of certain goods. Countries also differ in the amount of machinery and other technology, or the availability and cost of labour. Any surplus is exported (sold to), Any deficit is imported (bought).

Grade 10, Week 1 and 2, Unit 123 Business Stakeholders And Their Aims A stakeholder: is any person or group with a direct interest in the performance and activities of a business, such as: - owners, - managers, - workers, - consumers, - government, - community.

Grade 10, Week 1 and 2, Unit 124 Business Stakeholders And Their Aims Owners- Will take a share of the profits. - Risk takers. Workers- Employees. - Need a regular payment. Managers- Employees. - High salaries. Customers- Buy the goods and services. - Reliable products and services. Government- Responsible for the economy of the country. - Pass the laws. The whole community- Raise the living standards.

Grade 10, Week 1 and 2, Unit 125 Summary Goods and services are produced using scarce resources. Businesses supply goods and services to meet the needs and wants of consumers.

Grade 10, Week 1 and 2, Unit 126 Homework Submit on Thursday July 31, 2008 Define what is meant by scarcity when referring to the economic problem. Explain what is meant by “division of labour.” From the following list, decide which items are human needs and which are wants: - luxury house, - shelter, - Coca cola, - Car, - Clean water, - Designer jeans, - Clothing.

Grade 10, Week 1 and 2, Unit 127 Business in Context Shell is one of the world’s largest oil companies. The company makes products such as petrol and diesel from crude oil. Crude oil is unrefined oil that is found occurring naturally in deposits within the earth. To produce the petrol that people but from garages Shell must first extract the crude oil from the earth. The company does this by drilling oil wells, many of which are under the sea. Q1. What does Shell produce? Q2. Where can you buy Shell’s product? Q3. What is Shell’s product made?