PM/02Business Activity in Contemporary Society1 WANTS AND NEEDS A person’s NEEDS are limited -...
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Transcript of PM/02Business Activity in Contemporary Society1 WANTS AND NEEDS A person’s NEEDS are limited -...
PM/02 Business Activity in Contemporary Society 1
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/02 Business Activity in Contemporary Society 2
BUSINESS ACTIVITYBusiness activity
provides us with goods and services to satisfy
our wants
PM/02 Business Activity in Contemporary Society 3
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/02 Business Activity in Contemporary Society 4
SERVICES• Services are things which are done
for us, eg, banking, education, transport
PM/02 Business Activity in Contemporary Society 5
GOODS WANTS
Durable Non- durable
SERVICES
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/02 Business Activity in Contemporary Society 6
BUSINESS ACTIVITY
INPUTSResources
OUTPUTSGoods/Services
PROCESS
In order to produce goods and services (OUTPUTS), a business needs to use resources (INPUTS)
For exampleMaterialsLabour
For exampleTrainersMeal in restaurant
PM/02 Business Activity in Contemporary Society 7
FACTORS OF PRODUCTION
•LAND•LABOUR•CAPITAL •ENTERPRISE
The resources a business uses are called the FACTORS OF PRODUCTION.
PM/02 Business Activity in Contemporary Society 8
LAND• The factor of production called LAND
refers to all natural resources for example,–oil–coal–water– forests
• as well as land itself–
PM/02 Business Activity in Contemporary Society 9
LABOUR• The factor of production called
labour refers to the human resources used in the organisation. For example,– sales persons– accountants– cleaners– machinists
PM/02 Business Activity in Contemporary Society 10
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/02 Business Activity in Contemporary Society 11
ENTERPRISEThe ability of the owner or manager of a business to use the other factors of production - land, labour and capital - effectively.
LAND
LABOUR
CAPITAL
FACTOR OF PRODUCTI ON
LAND LABOUR CAPI TAL ENTERPRISE
Furniture
Herr Kutt
Carpark
£ 3,000 savings
Liam, Lisa and Linda
Equipment
£ 2,000 bank loan
Salon
Water
Lauren and Luke
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/02 Business Activity in Contemporary Society 13
THE BUSINESS CYCLE and WEALTH CREATION
Business produces goods and services to meet the
never ending wants ofconsumers
Consumers buy goods andservices to obtain the
things they want
Wealth is created forbusinesses and their
employees
Consumers have money from their wages to spendon other goods and
services
PM/02 Business Activity in Contemporary Society 14
BUSINESS CYCLE CYCLE OF BUSINESS
The continual flow of money from around the economy
CONSUMERSPeople who use a product or a service (may not be the buyer)
PRODUCTION The making of a product or the provision of a service
CONSUMPTIONThe using up of goods and services
PRODUCERS Business organisations who make a product or service
PM/02 Business Activity in Contemporary Society 15
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/02 Business Activity in Contemporary Society 16
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/02 Business Activity in Contemporary Society 17
PRIMARY SECTOR
• Businesses involved in exploiting natural resources
FORESTRY FARMING MINING OIL EXCAVATION
PM/02 Business Activity in Contemporary Society 18
SECONDARY SECTOR• Businesses involved in
manufacturing and construction• Taking natural resources and
changing them into things we can use
Clothing manufacture
Shipbuilding Carmanufacture
PM/02 Business Activity in Contemporary Society 19
TERTIARY SECTOR
• Businesses which provide a service, eg
BANKING BARBERS HOTEL
ORGANI SATI ON PRI MARY SECONDARY TERTI ARY
Shell Oil Company
Marks & Spencers
Ford Motors
Oxfam
Barratt Housebuilders
Showcase Cinema
Cadbury’s Ltd
De Beers Diamond Mines
Copy this table into your jotter and complete showing which of the following organisations are involved in Primary, Secondary and Tertiary activities
PM/02 Business Activity in Contemporary Society 21
UK SECTORS OF
ACTIVITY
4%
28% 68%
Primary Secondary Tertiary
• 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/02 Business Activity in Contemporary Society 22
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/02 Business Activity in Contemporary Society 23
Design a poster explaining the 3 sectors of business
activity