The document discusses business activity and key concepts including:
- Scarcity and the factors of production (land, labor, capital, enterprise) that businesses use to produce goods and services.
- The difference between needs and wants, and how demand and effective demand drive business activity.
- The three main types of business organizations - private enterprises, public enterprises, and non-profit enterprises - and how they differ in their objectives.
IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007
Introduction to business (chapter 1 - foundations of business & economics)Shawon Islam Somonoy
This Power-Point presentation is being used by the department of business administration to emphasize about the importance of business.
American International University-Bangladesh.
IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007
Introduction to business (chapter 1 - foundations of business & economics)Shawon Islam Somonoy
This Power-Point presentation is being used by the department of business administration to emphasize about the importance of business.
American International University-Bangladesh.
Iintroduction to business - Business Studies (A- Level/ Grade - 11)YEP Nepal
The material publishes under YEPNepal are not allowed to use for commercial/business purpose.
YEP Nepal is a non-profit organization and works for children.
file:///C|/Users/linziyu/Downloads/DownloadAttachment.html[10/17/2016 5:59:40 PM]
Abide Fghijlk
Introduction to Business
Professor Maros
Chapter 2 Case Study: Fresher than Fresh - Economics and how businesses can build and
distribute wealth
1) Explain how Lindsay obtained the funding to start her business.
In the Fresher Than Fresh (FTF) video, Lindsay explains that she started financing her business out of her
own pocket. However, she soon realized that she would incur a lot of expenses because of her desire have
her products be 100% organic. She received some financing from investors who wanted to see her business
succeed. 80% of these investments were made by local people who trusted in Lindsay and believe that this
business was going to be successful.
2) Explain the different economic systems and how Lindsay's business might fare under each one.
According to Better Business (p. 26-27), Capitalism is an economic system that allows freedom of choice
and encourages private ownership of the resources required to make and provide the goods and services
we enjoy. On the other hand, Communism (p. 26) is an economic system in which a state's government
makes all economics decisions and controls all the social services as well as many of the major resources
required for the production of goods and services. Finally, Socialism, is defined as a system whereby the
government owns or controls many basic businesses and services and the profits from them are distributed
evenly among the people.
The FTF video explains some differences that can be found between these economic systems. Capitalism
tends to be defined as a free exchange. People are in charge of setting their own prices and promoting
their own products. In this economic system people is allowed to keep their profits for themselves.
Communism does not provide for private business profits. Socialism allows businesses to keep some profits
but they have to pay high taxes so the government can provide extensive public services. It's important to
mention that some countries have a mixed economy, where countries can have elements of all
three systems.
Lindsay's business works within a capitalist system. She is free to produce her own products and she has
the right to keep profits. It's important to highlight the fact that she has to pay taxes as all businesses do.
In her case, it would be really hard to develop this business in a socialistic or communistic economy. In a
socialistic economy she would have to pay higher taxes that wouldn’t allow her to maintain
her businesses profitability. Her costs are high and the price of her product is $3.00 which is not that high
to cover all of her expenses (Fresher Than Fresh, video). If Fresher than Fresh operated in a
communist economy, Lindsay would be working to receive benefits from her government instead of being
able to keep her own profits.
3) Describe Adam Smith's concept of the "Invisible Hand."
According to Investopedia.com, the "I ...
Business idea generation in today's economyacemindia
The topic has been divided into 3 major parts Impact of Pandemic CORONA on Indian Economy, Business Opportunity Identification, Business Opportunities, and need of the hour in today’s Indian Environment.
www.acem.edu.in
Buy Verified PayPal Account | Buy Google 5 Star Reviewsusawebmarket
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Iintroduction to business - Business Studies (A- Level/ Grade - 11)YEP Nepal
The material publishes under YEPNepal are not allowed to use for commercial/business purpose.
YEP Nepal is a non-profit organization and works for children.
file:///C|/Users/linziyu/Downloads/DownloadAttachment.html[10/17/2016 5:59:40 PM]
Abide Fghijlk
Introduction to Business
Professor Maros
Chapter 2 Case Study: Fresher than Fresh - Economics and how businesses can build and
distribute wealth
1) Explain how Lindsay obtained the funding to start her business.
In the Fresher Than Fresh (FTF) video, Lindsay explains that she started financing her business out of her
own pocket. However, she soon realized that she would incur a lot of expenses because of her desire have
her products be 100% organic. She received some financing from investors who wanted to see her business
succeed. 80% of these investments were made by local people who trusted in Lindsay and believe that this
business was going to be successful.
2) Explain the different economic systems and how Lindsay's business might fare under each one.
According to Better Business (p. 26-27), Capitalism is an economic system that allows freedom of choice
and encourages private ownership of the resources required to make and provide the goods and services
we enjoy. On the other hand, Communism (p. 26) is an economic system in which a state's government
makes all economics decisions and controls all the social services as well as many of the major resources
required for the production of goods and services. Finally, Socialism, is defined as a system whereby the
government owns or controls many basic businesses and services and the profits from them are distributed
evenly among the people.
The FTF video explains some differences that can be found between these economic systems. Capitalism
tends to be defined as a free exchange. People are in charge of setting their own prices and promoting
their own products. In this economic system people is allowed to keep their profits for themselves.
Communism does not provide for private business profits. Socialism allows businesses to keep some profits
but they have to pay high taxes so the government can provide extensive public services. It's important to
mention that some countries have a mixed economy, where countries can have elements of all
three systems.
Lindsay's business works within a capitalist system. She is free to produce her own products and she has
the right to keep profits. It's important to highlight the fact that she has to pay taxes as all businesses do.
In her case, it would be really hard to develop this business in a socialistic or communistic economy. In a
socialistic economy she would have to pay higher taxes that wouldn’t allow her to maintain
her businesses profitability. Her costs are high and the price of her product is $3.00 which is not that high
to cover all of her expenses (Fresher Than Fresh, video). If Fresher than Fresh operated in a
communist economy, Lindsay would be working to receive benefits from her government instead of being
able to keep her own profits.
3) Describe Adam Smith's concept of the "Invisible Hand."
According to Investopedia.com, the "I ...
Business idea generation in today's economyacemindia
The topic has been divided into 3 major parts Impact of Pandemic CORONA on Indian Economy, Business Opportunity Identification, Business Opportunities, and need of the hour in today’s Indian Environment.
www.acem.edu.in
Buy Verified PayPal Account | Buy Google 5 Star Reviewsusawebmarket
Buy Verified PayPal Account
Looking to buy verified PayPal accounts? Discover 7 expert tips for safely purchasing a verified PayPal account in 2024. Ensure security and reliability for your transactions.
PayPal Services Features-
🟢 Email Access
🟢 Bank Added
🟢 Card Verified
🟢 Full SSN Provided
🟢 Phone Number Access
🟢 Driving License Copy
🟢 Fasted Delivery
Client Satisfaction is Our First priority. Our services is very appropriate to buy. We assume that the first-rate way to purchase our offerings is to order on the website. If you have any worry in our cooperation usually You can order us on Skype or Telegram.
24/7 Hours Reply/Please Contact
usawebmarketEmail: support@usawebmarket.com
Skype: usawebmarket
Telegram: @usawebmarket
WhatsApp: +1(218) 203-5951
USA WEB MARKET is the Best Verified PayPal, Payoneer, Cash App, Skrill, Neteller, Stripe Account and SEO, SMM Service provider.100%Satisfection granted.100% replacement Granted.
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A personal brand exploration presentation summarizes an individual's unique qualities and goals, covering strengths, values, passions, and target audience. It helps individuals understand what makes them stand out, their desired image, and how they aim to achieve it.
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RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
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Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Implicitly or explicitly all competing businesses employ a strategy to select a mix
of marketing resources. Formulating such competitive strategies fundamentally
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price and product quality), as well as assessing competitive and market conditions
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Putting the SPARK into Virtual Training.pptxCynthia Clay
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Have you ever heard that user-generated content or video testimonials can take your brand to the next level? We will explore how you can effectively use video testimonials to leverage and boost your sales, content strategy, and increase your CRM data.🤯
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2. 2
+
Learning outcomes
Develop an understanding of needs, wants and scarcity
Understand the purpose of business activity
Develop knowledge of the objectives of non-profit making activity,
private enterprise and public enterprise
Appreciate the concept of adding value
Definition of ‘scarcity’
The basic economic problem that arises because people have
unlimited wants but resources are limited. Because of scarcity,
various economic decisions must be made to allocate resources
efficiently
3. 3
+
What is enterprise?
The term “enterprise” has two common meanings.
Firstly, an enterprise is simply another name for a business. You will
often come across the use of the word when reading about start-ups
and other businesses…“Simon Cowell’s enterprise” or “Michelle set
up her successful enterprise after leaving teaching”.
Secondly, and perhaps more importantly, the word enterprise
describes the actions of someone who shows some initiative by
taking a risk by setting up, investing in and running a business.
4. 4
+
Business Activity
Businesses produce goods and services.These are the
products of the business.
Which are goods and which are services?
7. 7
+
Needs and wants
What we need and what we want can sometimes be confusing.
Often you say you need a new iPod/mobile device when in
fact you want it rather than need it.
Which items do you think people need and which items do
you think people want?
8. 8
+
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 it’s 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 petrol or other oil products
customers want.
Individually answer the following questions:
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?
9. 9
+
Business in context
1. KPC produces oil products such as petrol and diesel.
2. KPC produces goods (products).
3. KPC’s product can be purchased at garages and gas or petrol
stations.
4. KPC’s product is made from raw or crude oil.
5. Student’s own answer. Points to consider could include:
KPC has the necessary raw materials in its country.
KPC has developed the skills to extract and produce petrol and
diesel.This means it could seek new locations to find oil.
There is a market for the product.
10. 10
+
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.
1.1 Activity
11. 11
+
1.1 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.
12. 12
+
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.
13. 13
+
Demand and effective demand
When you want something, you create a demand for it.
You have decided that you want the new iPhone 4S.What do
you require to satisfy your want?
14. 14
+
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
15. 15
+
Your demand for an iPhone 4s 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.
Demand and effective demand
18. 18
+
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 their own country.
23. 23
+
Business Activity
Activity 1:
In pairs, list 3 major international businesses and 3 smaller
businesses that operate in their own country and 3 local
businesses.
24. 24
+
Activity 1.2
1. What is the main difference between needs and wants?
2. Make two lists: the first showing the things that you need; the
second listing things that you want.
3. Identify 3 kinds of businesses or organisations that supply
each item on your lists.
4. Select two businesses that you have identified and explain
why you think that they supply the item.
25. 25
+
Activity 1.2 answers
1. Needs are items that we must have in order to live, whereas wants
are items that we would like to have but which are not essential for
us to live.
2. Student’s own answer. Needs include items such as food, water,
shelter and clothing.Wants might include a certain style of
clothing, a holiday, a mobile phone and so on.
3. Student’s own answer based on items identified in question 2.
4. Students own answer based on businesses identified in question 3.
Reasons why the business supplies an item could be:
it wants to provide a service
it has spotted a market for the product to make money.
26. 26
+
Private sector: private businesses
and enterprises
Private Sector: Business activity owned financed and controlled by
private individuals
28. 28
+
Public sector: businesses owned
and run by the government are
public enterprises
Public Sector: Business Activity owned, financed and controlled by
the state through government or local authorities
Government – key departments set policy and monitor
implementation
Local Authorities – County Councils, District Councils
Schools
Hospitals
Libraries
Public Corporations – BBC
Transport
29. 29
+
Non-profit-making: a third type of
enterprise
Non-profit-making organisations include charities and
voluntary organisations.
These organisations are set up to fulfil a perceived social
need or to provide help to a specific section of the
community.
30. 30
+
Similarities and differences
Non-profit-making and public sector organisations have profit
as a high priority
The difference between these two is that public sector
organisations is run by or on behalf of the government whilst
non-profit-organisations could easily be set up by private
individuals who want to support a specific cause.
The government focus on enriching society and ensuring a
basic standard of living
31. 31
+
Similarities and differences
Non-profit-making and public sector organisations have profit as a
high priority
The difference between these two is that public sector organisations
is run by or on behalf of the government whilst non-profit-
organisations could easily be set up by private individuals who want
to support a specific cause.
The government focus on enriching society and ensuring a basic
standard of living
All organisations in the public and private sector are involved in
some form of business activity and it is only their objectives that
differ. For example: what, whom and why they produce goods and
services.
32. 32
+
Activity 1.3
1. Investigate the different types of business in your local area.
You should find examples of private enterprise, public
enterprise, and non-profit-making activity.
2. Identify the objectives of each.
3. Draw up a table
Type Organisation Objective
Private sector
Public sector
Non-profit-makng
33. 33
+
Deciding on what to produce
Resources found on earth are finite or in limited supply such
as:
Crude oil Gold Aluminum
34. 34
+
Scarcity
Some resources such as air satisfy everybody’s needs but
most resources are not plentiful enough for this.
Although trees are renewable you have to be careful of the
amount of trees cut down taking into consideration of the time
it takes for the replacement tree to grow.
36. 36
+
Managing scarce resources
Since resources to produce goods and services are scarce a
choice must be made to decide what to produce from them.
For example, furniture and houses can be made from timber
so a decision needs to be made whether to cultivate trees for
furniture or houses.
Similarly, if a government spends too much money on building
skills then it will not be able to spend much on training extra
doctors
37. 37
+
Cost and opportunity cost
If you want an iPod and a pair of shoes but only have enough
money to buy one of them, you will have to choose which one
to buy. Both products cost money and that is their financial
cost.
There is also an opportunity cost – the possibility of buying
and enjoying the use of the other item.
If you buy the iPod, the opportunity cost of the iPod is the
shoes
If you buy the shoes, the opportunity cost of the shoes is the
iPod
Here's another example: if a gardener decides to grow carrots,
his or her opportunity cost is the alternative crop that might
have been grown instead (potatoes, tomatoes, pumpkins, etc.)
38. 38
+
Business activity and the factors of
production
Business activity involves the use of resources known as
factors of production.These are:
Land
Labour
Capital
Enterprise
39. 39
+
Factors of production: land
Land includes all resources that occur naturally.
Can you think of any?
40. 40
+
Factors of production: labour
Labour is the effort of work provided by people.
Labour-intensive production can often be found in many
developing countries. Labour-intensive production means
labour is plentiful and relatively cheap compared with the
technology available to do the job.
In more industrialised countries such as the UK labour-
intensive production can be more expensive in terms of
wages than the cost of running machinery.
41. 41
+
Factors of production: capital
Capital includes items used in the production of goods and services
made by people.These include:
Buildings
Machinery
Equipment
Finance required to purchase these items
Production that uses a high proportion of capital compared to labour
is called capital-intensive. Capital-intensive production can be seen
as a cheaper and more efficient production using the latest
technology than by hand (labour-intensive)
42. 42
+
Factors of production: enterprise
Enterprise is the ability, skill and enthusiasm to take risks involved in
developing a business idea and gathering appropriate resources.
All businesses combine factors of production to produce goods and
services that people want to buy.
A large company like Kuwait Petroleum Corporation will use all four
elements to produce the final product (petrol or diesel).
1. Land- oil wells and refineries
2. Labour- staff
3. Capital- drilling equipment, pipelines, office buildings
4. Enterprise- the skill of senior management
44. 44
+
Adding Value
Added value = the difference between the price of the
finished product/service and the cost of the inputs involved in
making it.
This is because of the work carried out increases the value of
the parts and raw materials used.When the product is
complete its value and the price it is sold at is more than the
value of the factors of production used to make the product.
So added value is the increase in value that a business creates
by undertaking the production process.
It is quite easy to think of some examples of how a production
process can add value.
Consider the examples of new cars rolling down the
production line being assembled by robots. The final,
completed and shiny new car that comes off the production
line has a value (price) that is more than the cost of the sum of
45. 45
+
Activity 1.4
1. Consider one of the following businesses:
a farm
a furniture maker
a shop
a cosmetics manufacturer
a paper producer
a producer of music CDs
46. 46
+
Activity 1.4
Construct a table like the one shown below. Complete your
table with examples of the types of resources or factors of
production used by your selected business.The first line of
the table has been completed as an illustration.
Factors of production
Business Land Labour Capital Enterprise
Farm Land for
grazing
animals or
growing
crops
Farm
workers
Tractors Skills and
efforts of the
farmer in
setting up and
running the
farm
47. 47
+
Activity 1.4
Design a poster of diagram showing how, by combining these
resources and transforming them into a finished product, the
business adds value to the resources.
48. 48
+
Adding value
You don’t have to use robots or have the culinary skills of
Gordon Ramsay to “add value”. For example, businesses can
add value by:
Building a brand – a reputation for quality, value etc that
customers are prepared to pay for. Nike trainers sell for
much more than Hi-tec, even though the production costs per
pair are probably pretty similar!
Delivering excellent service – high quality, attentive
personal service can make the difference between achieving
a high price or a medium one
Product features and benefits – for example, additional
functionality in different versions of software can enable a
software seller to charge higher prices; different models of
motor vehicles are designed to achieve the same effect.
Offering convenience – customers will often pay a little
more for a product that they can have straightaway, or which
saves them time.
49. 49
+
Adding value Why would people pay a bit more
money for a loaf of bread than
make it at home?
50. 50
+
Summary
Enterprise
Enterprise
Enterprise
Enterprise
Opportunity
Opportunity
cost
cost
Opportunity
Opportunity
cost
cost
Factors of
Factors of
production
production
Factors of
Factors of
production
production
Scarcity
Scarcity
Scarcity
Scarcity
Effective
Effective
demand
demand
Effective
Effective
demand
demand
Demand
Demand
Demand
Demand
Capital
Capital
Capital
Capital
Labour
Labour
Labour
Labour
Land
Land
Land
Land
Supplying
Supplying
needs and
needs and
wants
wants
Supplying
Supplying
needs and
needs and
wants
wants
Goods and
Goods and
services
services
Goods and
Goods and
services
services
What is
What is
business?
business?
What is
What is
business?
business? Resources
Resources
Resources
Resources
Adding value
Adding value
Adding value
Adding value
Selling price
Selling price
minus cost
minus cost
Selling price
Selling price
minus cost
minus cost
51. 51
+
Summary
1. We all have needs and wants.
2. The main purpose of business activity is to supply the goods and
services people want.
3. The objective of most private sector businesses is making a profit.
4. The main objective of public enterprise is to provide services to the
local and national community.
5. The main objective of non-profit-making organisations is to meet a
perceived social need or to provide help to a specific section of the
community that is not met by private or public enterprise
6. Businesses produce goods and services using scarce resources known
as factors of production: land, labour, capital, enterprise.
7. Value is added to the resources because of the work carried out to
produce the finished product has a value that increases the value of the
parts and raw materials used.
52. 52
+Key terms
Added value – the difference between the selling price of a
product and the cost of raw materials used to make it
Effective demand – demand for a product that is backed up by
the ability and willingness to pay for it
Factors of production – the four categories of resources that
are used to produce goods and services: land, labour, capital,
enterprise
Goods- tangible products that can be touched and consumed
Needs – things necessary to sustain life
Opportunity cost – the cost of something in terms of the next
best thing
Private sector – the sector of business consisting of businesses
owned by private individuals or groups
53. Profit – the profit a business makes is the amount by which its
income from selling the goods and services it produces
exceeds the costs of producing those goods and services
Public sector – the sector of business consisting of
businesses owned by the state
Resources – items of limited availability that can be used in
human activity
Services – things other people or businesses do for you
Wants – things chosen to satisfy a need or to make life more
enjoyable
53
54. 54
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Factors of production
Match each factor of production to the correct
description and example (cards).
Exemplar question:
What is meant by the term ‘added value’? (2)