2. By The End Of This Unit You Must Know
• What is needs, wants, and scarcity
• The difference between needs, wants, and scarcity
• The purpose of business activity
• the objectives of non-profit making activity, private enterprise and public
enterprise
• The concept of adding value
3. Goods And Services
• Services
Services are things that
other people do for you,
such as cutting your hair
or selling you goods in a
shop.
• Goods
Goods are things you can touch
and use, such as clothes and books
4. Needs And Wants
Needs are items that we
must have in order to
live
Example: Food, Drink
and Shelter
Wants are items that we would
like to have, although we
won’t die without them.
Example:
a computer
a holiday
a car
Influence
5. Business In Context:
• Kuwait Petroleum Corporation (KPC) is one of the world’s largest oil companies.
The company makes products such as petrol and diesel from crude oil. Crude oil is
oil in its raw or natural state. It occurs naturally in deposits within the earth. To
produce the petrol that people buy from garages, KPC must first extract the crude
oil from the earth. The company does this by drilling oil wells, many of which are
under the sea. KPC then transports the crude oil to oil refineries where it is turned
into the petrol or other oil products that customers want. 1) What does KPC
produce? 2) Does KPC produce goods or services? 3) Where can you buy
KPC’s product? 4) What is KPC’s product made from? 5) Why do you think
KPC produces petrol and diesel?
6. Demand And Effective Demand
Demand
When you want something, you create a
demand for it
Effective Demand
when enough people want something and are
able and willing to pay for it
To satisfy your want you
must have money and
you must be ready to pay
for it.
7. Activity
• What is the main difference between needs and wants?
• Make two lists: the first showing the things that you need; the second listing
things that you want.
• Identify three kinds of businesses or organizations that supply each item on
your lists.
• Select two businesses that you have identified and explain why you think that
they supply the item.
8. Businesses and The Purpose of Business
Activity
Private Sector Organization:
Businesses owned and run by
private individuals. They are
private businesses, or private
enterprises, and are in the private
sector.
2 Types Of
Businesses Public Sector Organization:
Businesses owned and run by
the government to provide
services to public are public
enterprises
NGO: 3 Type of Enterprise:
10. Activity Solutions
Type Organization Objective
Private Sector Shops To make profit
Public Sector Shaukat Khanum Hospital To provide services
Non- Profit Making JDC Not owned by government and
to main aim is to provide services
to people.
11. Scarcity And Opportunity Cost
• Everything found on Earth is finite, or in limited supply known as scarcity.
• If you chose one activity (for example, an investment) you are giving up the
opportunity to do a different option.
12. Business Activity and The Factors of
Production
• Land ( all resources that occur naturally)
• Labor (the effort or work provided by people)
Labor Intensive Production
Developing countries
• Capital (Items used in the production of goods and services)
• Capital Intensive
15. Activity Solutions
Business Land Labor Capital Enterprise
A Furniture Maker Trees
wood from trees
for making
furniture
Labor for making
furniture
Machinery Skills of labors in
making furniture
A shop Land
Required for
opening a shop
Labor required for
building a shop
Shop Essentials Skills required to
build a shop.
16. Added Value
• The difference between the selling price of a product and the cost of the raw
materials used to make it.
