1. Business Economics
The Bear Necessities

2. Fixed and Variable costs
Electricity
Rent
VAT (after sales tax)
Cotton
Council tax
Wages of workers
Catering costs
Thread
Computer systems
Insurance
Advertising
Workers health benefits
Water
Dyes
Add three other things to each column.

3. Fixed / Variable? Are wages really a variable cost? Explain why?
What are the different types of contracts that workers can be given and why do they vary?

4. Fixed Salaries
Workers on this type of contract will work a set number of hours per week.
Their wage will not change depending upon their productivity.
They will have set responsibilities.
These workers can be full or part time.
Common examples of workers which would have this type of contract would be librarians, office workers, guards, teachers, doctors.

5. Hourly rate
These workers wages will vary depending on the number of hours they work.
This type of contract is common with low skilled jobs with relatively low returns
Examples of this type of job would be shop assistants, waiters, labourers, bar workers, agricultural workers.
Many young workers with part time jobs would take this type of contract.
Their wages may be ‘topped up’ with tips

6. Salary + Bonuses This is one of the most common types of contract.
The salary gives workers the security of knowing they are guaranteed a certain standard of living but are motivated to work harder with the prospect of bonuses to top up their wages.
Bonuses can be given for achieving a set of targets related to production levels or quality of service given. In certain industries, ie finance, bonuses often form the main part of the take home wage.
Health and insurance benefits are usually included. Extra benefits are common such as housing and cars with expat workers.
A huge range of industries in the private sector offer these contracts from insurance companies, banks, food producers, consumer durables, brokers…

7. Individual contracts This is becoming common in the private sector.
Often highly skilled workers will be paid a daily wage or a lump sum on completion of a short project that workers within the company do not have the expertize to complete.
These contracts can be highly lucrative.
Examples of professionals who are given these types of contracts are; IT specialists, architects, marketing professionals, graphic designers or business consultants

8. Task
You have 7 minutes to turn this information into a diagram.

9. Key terms for your glossary
Fixed costs
Variable costs
Total costs
Total revenue
Average revenue
Turnover
Break even point
Profit/loss margin

10. 1. Fixed costs are those which do not vary with the amount produced ie rent
2.200
3.200
4. Variable costs are those which change with the amount produced
5. 800
7. a) 1000 b) 8200

11. Bears produced
Fixed costs
Variable costs
Total costs
Average costs
200 50
400
600 12
100
800
1000 10
200
1600
1800 9
300
2400
2600
8.67
400
3200
3400
8.5
500
4000
4200
8.4
600
200
4800
5000
8.3
700
5600
5800
8.28
800
6400
6600
8.25
900
7200
7400
8.22
1000
200
8000
8200
8.2

12. 10. 10
11. Average revenue = Total revenue
Number of bears sold
14. Complete table
16. TR-TC
17. Total cost
Number produced

13. Now your task is to create a new section in your glossaries called ‘Business Economics’. Enter in all the new terms with their definitions.

14. Task
Complete the following task in Chapter 18 on paper.