This document provides an overview of business activity, raw materials, and demand. It defines raw materials as materials or substances used in primary production or manufacturing. It then discusses three products - bread, an oak coffee table, and a book - and their raw materials (flour, wood, paper respectively) and where they come from (farms and trees). It notes that wheat and trees are renewable but it takes many years for trees to grow. The document then discusses demand, effective demand, needs and wants. It defines the purpose of business activity as producing goods and services that individuals and organizations want.
2. Think carefully about the following products and answer the questions.
(a)A loaf of bread (b) An oak coffee table (c) a book
1. What are the raw materials that each product is made of?
2. Where do these raw materials come from?
3. If society keeps using these raw materials, will they run out? Explain your
answer.
Definition ‘raw materials’
A material or substance used in the primary production or
manufacturing of a good.
3. Answers
1. Bread is made from flour; an oak coffee table is made of wood; the
book is made of paper.
2. Flour is made from wheat that is grown on farms; wood comes from
trees that grow on the land; paper is made from wood and other fibres.
3. Wheat and trees are both renewable. This means that as they are
used to make products, new wheat and trees can be grown. However,
while a new crop of wheat can be grown every year, it takes many years
for trees to grow. If these resources are used to make products faster
than they can be replaced, supplies will run out.
4. Demand and effective demand
Our wants influence the way we satisfy our needs. For instance, if you need food which would you
choose to satisfy your need?
• You may choose to satisfy your need by eating a burger because that is what you want.
5. Demand and effective demand
• When you want something, you create a demand for it.
• You have decided that you want the new iPhone 14. What do you require to satisfy your want?
6. Demand and effective demand
To satisfy your want you will need money to pay for it as well as the willingness to spend the
money on it. You may wish to spend the money on something else.
7. Effective Demand
Your demand for an iPhone 14 will not be successful unless other
people want the same phone too and have the money and are willing to
pay for it.
Apple would not make these products if you are the only person who
wants them. The same response applies to businesses.
This is called effective demand. People create effective demand when
enough people want something and are able to and willing to pay for it.
10. The purpose of business activity
Businesses have been set up to produce goods and services.
These goods and services are supplied to individuals and
other business organisations that want them.
• There are many types of business organisation. Some are
major international businesses and others are smaller local
businesses.
Activity: Come up with 3 major international businesses and 3
smaller businesses that operate in Thailand.
