2. In this unit you will learn…….
⦿ The economic problem of unlimited wants and
limited resources
⦿ The factors of production
⦿ The development of economic activity and the
use of specialization
⦿ What is meant by a business
⦿ The most common aims of business
⦿ The different groups involved in business
activity.
4. Needs and Wants
⦿ Needs
› Essential goods or
services necessary
for living.
› Satisfy the basic
things for life.
⦿ Wants
› Non-essential goods
and services that
people would like to
have.
› Interests & Tastes
16. Limited Resources
Production 200 years ago
Joe cuts
the wood
He
assembles
the table
Joe
polishes the
table
Joe delivers the table on a
horse and cart
1 4
3
2
17. Limited Resources
Modern Day Production
The wood for 20 tables is cut
with a specialist machine
Carpenters assemble the
tables
The tables are finished in the
polishing department
A transport company collects the tables
to deliver them to furniture retailers
1
4
3
2
18. Making the best use of limited
resources
◻ Specialization / Division of
Labour
⬜ Production Process
⬜ Different tasks split up
⬜ Workers performs a task
19. Specialization
Division of Labour
◻ Advantages
⬜ Specialised task training
⬜ Increases efficiency
⬜ Increases output
⬜ Save time
◻ Disadvantages
⬜ Bored workers
⬜ Possible drops in efficiency
⬜ Production stopped due to absence
20. Why business activity is
needed?
◻ Unlimited wants
◻ 4 factors of production
⬜ Resources in limited supply to make goods and
services
◻ Scarcity
⬜ Limited resources – unlimited wants
◻ Choice
⬜ Opportunity Cost
◻ Specialisation
⬜ Improves efficient use of resources
21. Business Activity
◻ Combines s_____ f_____of p_______ in
order to produce g_____ and s_______.
◻ Produces those goods and services which are
needed to s______ the n______ and w_____
of the p___________
◻ E_______ people as worker and pays them
w____ / s______ to allow them to consume
p_______ made by other p________.
22. Aim of Businesses
→ Combine factors of production
→ Produce products
→ satisfy peoples wants
24. Business Objectives
◻ Aim / Target to work towards
⬜ Make a Profit
⬜ To increase added value
⬜ To expand the business
⬜ To achieve business survival
⬜ To provide a service
32. Groups involved in Business
Business
Stakeholders
owners managers workers
consumers community government
33. Explain and provide examples
for the following…….
⦿ The difference between wants and needs,
with examples
⦿ Scarce resources
⦿ Principle of opportunity costs
⦿ Importance of specialization in production
⦿ Purpose of business activity
⦿ Importance of different groups in business
activities.
