Welcome to IGCSE Business Studies

Mr.Owen

The Purpose of

Business Activity

• Make a list of Your needs and wantsWhat do You Notice?

Needs Wants

A good or service to keep youliving

A good or service you would likeBut is not essential

Learning Objectives

To understand the ‘ECONOMIC PROBLEM’

To understand the FOUR FACTORS OF PRODUCTION

To understand the Three Sectors of Business Activity

Who are they? What do they have in common and what skills do they possess?

The Four Factors of Production (CELL)

CAPITAL - Money

ENTERPRISE – Entrepreneurial qualities

LAND – Raw Materials (Resources)

LABOUR - Workers

What Do These Four Factors Have in Common?

SCARCITY

=

THE ECONOMIC

PROBLEM

There are not enough resources to meet all needs and wants e.g. is this endless oil and gold? What will happen as these resources

become scarcer?

All these factors are not infinite. Therefore:

Application Time

Read Nestle Case Study for Real Life Business scenario below this powerpoint on Haiku.

OPPORTUNITY COST

Because of SCARCITY businesses have to make choices.

“THE BENEFITS GIVEN UP OF THE NEXT BEST CHOICE”

You only have enough money for One Option – Which one is your opportunity cost? Why?

Xbox 360

Playstation 3

Playstation Portable and 5 games

Nintendo Wii and Gamecube

Ninteno Wii and Nintendo DS

Specialisation & Division of Labour

Making the best use of limited resources

Breaking production down in to small tasks (DIVISION) and each worker becomes a specialist!

Click here for more info

What Have we Learnt?

CELL

Resources are scarce

Opportunity cost

Specialistaion & Division of Labour

So How Did Richard Branson Start Out? Click Here

Businesses Skills