NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS HOW DO SMALL BUSINESSES OPERATE Consumer...

NAT 4 BUSINESS IN ACTION NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS NAT 5 UNDERSTANDING BUSINESS

HOW DO SMALL HOW DO SMALL BUSINESSES OPERATEBUSINESSES OPERATE

Consumer Needs, Wants and Consumer Needs, Wants and ChoicesChoices


LEARNING INTENTIONS/SUCCESS LEARNING INTENTIONS/SUCCESS CRITERIACRITERIA

Learning Intentions:Learning Intentions:I understand whatI understand whatbusinesses dobusinesses do

Success Criteria:Success Criteria: I can identify andI can identify and

describe the differentdescribe the differentneeds and wants thatneeds and wants thatbusinesses satisfybusinesses satisfy

I can identify and describe I can identify and describe the different goods and the different goods and services that business services that business provideprovide

I can identify and describe I can identify and describe the Sectors of Industry in the Sectors of Industry in which goods and services which goods and services are provided.are provided.

I can describe how scare I can describe how scare resources leads to resources leads to opportunity cost and what opportunity cost and what influences consumer influences consumer demanddemand


IMAGINE …IMAGINE …

You are on a plane heading for AustraliaYou are on a plane heading for Australia

which develops a fault. The Captain which develops a fault. The Captain

announces that he will crash land the announces that he will crash land the planeplane

on a deserted island in the middle of theon a deserted island in the middle of the

ocean. You do not know whether orocean. You do not know whether or

not an emergency distress signal (May not an emergency distress signal (May Day)Day)

was sent!was sent!


TASK 1TASK 1

Working Working on your ownon your own and without any and without any

discussion with others, make a list in yourdiscussion with others, make a list in your

jotters of 10 items that you would like tojotters of 10 items that you would like to

take with you. (This list can includetake with you. (This list can include

anything you want other than items thatanything you want other than items that

would help you leave the island eg anwould help you leave the island eg an

inflatable boat or a long range radio).inflatable boat or a long range radio).


Task 2Task 2

In groupsIn groups, exchange information about the, exchange information about thecontents of each person’s list and why they chosecontents of each person’s list and why they chosetheir items. Working together, agree a ‘group’ listtheir items. Working together, agree a ‘group’ listcontaining 10 items.containing 10 items.

Unfortunately, there is only enough time toUnfortunately, there is only enough time togather together 5 items and not 10. Followinggather together 5 items and not 10. Followingdiscussion, agree the 5 items to be taken. discussion, agree the 5 items to be taken.

ExplainExplainwhat influenced your choices.what influenced your choices.


GOOD NEWS!GOOD NEWS!

Having survived on the deserted Having survived on the deserted island, island,

some good news! You have just some good news! You have just received a received a

letter stating that a relative that you letter stating that a relative that you have have

never met has left you £5,000. never met has left you £5,000.


Task 3Task 3

Working Working on your ownon your own, make a ‘wish list’ to show what , make a ‘wish list’ to show what you you

would do with the money.would do with the money.

Bad news! A mistake was made in the letter and theBad news! A mistake was made in the letter and theamount that you will receive is only £500. Revise youramount that you will receive is only £500. Revise yourwish list so that it contains no more than 5 items wish list so that it contains no more than 5 items

costing costing less than £500 in total.less than £500 in total.

In groupsIn groups, exchange information about your wish list , exchange information about your wish list contents and the items you ‘gave up’.contents and the items you ‘gave up’.


Task 4Task 4

Suggest reasons why the items chosen when leaving Suggest reasons why the items chosen when leaving thethe

plane and those in the wish lists were different. plane and those in the wish lists were different.

Exchange views on what would have happened had the Exchange views on what would have happened had the items chosen for the island and the wish lists beenitems chosen for the island and the wish lists beenswapped.swapped.

Explain why different people value different things inExplain why different people value different things indifferent ways and if this is a good or bad thing.different ways and if this is a good or bad thing.

Exchange views on whether one person’s list was Exchange views on whether one person’s list was better than others.better than others.


Task 5Task 5

For each of the following situations explain why the For each of the following situations explain why the choiceschoices

made by each of the people involved might be made by each of the people involved might be different.different.

A family with 2 children and a single person are A family with 2 children and a single person are buying a carbuying a carSuggest a type of car that each might buySuggest a type of car that each might buy

An unemployed person and a person earning£25K/year are offered a job with a salary of £22K Suggest how each might respond to the job offer

An elderly man and a teenager get the chance to see An elderly man and a teenager get the chance to see a 60s band livea 60s band liveSuggest how each person might view this opportunitySuggest how each person might view this opportunity


How are Individuals’ Choices How are Individuals’ Choices Met?Met?

ANSWER – BY BUSINESSES!ANSWER – BY BUSINESSES!

So, we have established that we have So, we have established that we have NEEDS NEEDS

(items we need to survive (Food, Water, (items we need to survive (Food, Water, Shelter, Shelter,

Clothing, Warmth) and we also have WANTS. Clothing, Warmth) and we also have WANTS.

However, our wants are unlimited but theHowever, our wants are unlimited but the

resources that make our wants are not.resources that make our wants are not.


TASK 6 - SCARCE RESOURCESTASK 6 - SCARCE RESOURCES

In pairs, make a list in your jotters of In pairs, make a list in your jotters of the the

resources that you think are scarce.resources that you think are scarce.

Here are a few suggestions – do you Here are a few suggestions – do you have have

any more?any more?TimeTime MoneyMoney Oil, Gas Coal Oil, Gas Coal

and and ElectricityElectricity

WheatWheat BarleyBarley VegetablesVegetables

FishFish MeatMeat Cotton/WoolCotton/Wool


HOW DO WE SOLVE THIS HOW DO WE SOLVE THIS PROBLEMPROBLEM

When something is scarce, meaning that weWhen something is scarce, meaning that wecan’t have everything that we want, what docan’t have everything that we want, what dowe as consumers do?we as consumers do?

We make CHOICES. However, this usually We make CHOICES. However, this usually involves giving something up in order to getinvolves giving something up in order to getthe item that gives us the most satisfaction.the item that gives us the most satisfaction.The cost of choosing one thing is what we The cost of choosing one thing is what we

gave upgave upto get it. This is known as the OPPORTUNITY to get it. This is known as the OPPORTUNITY COST.COST.


A successful business …A successful business …

Must try to provide goods and Must try to provide goods and services that we (services that we (CONSUMERSCONSUMERS) are ) are willing andwilling and ableable to to buy in large buy in large quantities (ie they have enough quantities (ie they have enough money to buy it and are willing to money to buy it and are willing to give up other things to do so). give up other things to do so).

Different things influence the Different things influence the demand that each of us has for demand that each of us has for individual products and services.individual products and services.


What Influences Consumers?What Influences Consumers?

Fashion and TasteFashion and Taste eg what fashion and eg what fashion and styles are popularstyles are popular

Price of the product or servicePrice of the product or service eg the eg the higher the price to be paid, the higher the higher the price to be paid, the higher the Opportunity Cost in terms of things given Opportunity Cost in terms of things given up to get itup to get it

Price of other products and servicesPrice of other products and services eg is it a bargain or good value for money?eg is it a bargain or good value for money?

IncomeIncome we have eg we can only buy the we have eg we can only buy the things that we can afford once our NEEDS things that we can afford once our NEEDS have been taken care of.have been taken care of.


GOODS AND SERVICESGOODS AND SERVICES

Challenge!Challenge!In pairs, think of as many words or In pairs, think of as many words or

phrases phrases

as possible you could use to describe as possible you could use to describe goodsgoods

and services.and services.


GOODS CAN BE …GOODS CAN BE …

Durable Durable – last for a long time eg a car– last for a long time eg a carNon-durableNon-durable – ie may be used up quite quickly – ie may be used up quite quickly eg a sandwicheg a sandwichTangibleTangible – they have a physical presence and – they have a physical presence and

wewecan see and touch themcan see and touch themConsumerConsumer – sold to people (consumers) rather – sold to people (consumers) ratherthan other businessesthan other businessesCapitalCapital – used by businesses to make consumer – used by businesses to make consumer goods and other capital goods eg productiongoods and other capital goods eg productionequipment.equipment.


SERVICES CAN BE …SERVICES CAN BE …

IntangibleIntangible – we cannot touch them eg – we cannot touch them eg servicing of a carservicing of a car

Non-durableNon-durable – they are used up quickly eg – they are used up quickly eggoing to the cinema to watch a filmgoing to the cinema to watch a film

DurableDurable – last for quite a long time – last for quite a long time eg insurance will last for one year at a eg insurance will last for one year at a

time.time.


Sectors of IndustrySectors of Industry

Goods are produced in the Primary andGoods are produced in the Primary and

Secondary Sectors of Industry.Secondary Sectors of Industry.

Services are provided in the Tertiary Services are provided in the Tertiary SectorSector

of Industry.of Industry.


PRIMARY SECTOR OF PRIMARY SECTOR OF INDUSTRYINDUSTRY

Businesses which exist in the Businesses which exist in the Primary SectorSector

of Industry are those that are concernedof Industry are those that are concernedwith with using natural resourcesusing natural resources such as such as farming, oil drilling, mining, fishing, andfarming, oil drilling, mining, fishing, andforestryforestry. . In other words these businesses areIn other words these businesses areconcerned with growing products orconcerned with growing products orextracting resources from the ground.extracting resources from the ground.


SECONDARY SECTOR OF SECONDARY SECTOR OF INDUSTRYINDUSTRY

Businesses which exist in the Businesses which exist in the Secondary Sector ofSector ofIndustry are concerned with the Industry are concerned with the manufacturing ofmanufacturing ofproductsproducts. .

Manufacturing businesses Manufacturing businesses take the raw materialstake the raw materialsfrom other industries in the Primary Sector and from other industries in the Primary Sector and convert them into different productsconvert them into different products. .

For example Kellogg’s will purchase crops fromFor example Kellogg’s will purchase crops fromfarmers to manufacture breakfast cereals.farmers to manufacture breakfast cereals.


TERTIARY SECTOR OF TERTIARY SECTOR OF INDUSTRYINDUSTRY

Businesses which exist in the Businesses which exist in the Tertiary SectorSector

do not produce a product. They aredo not produce a product. They are

concerned with concerned with providing servicesproviding services like like

banking, tourism, beauticians, banking, tourism, beauticians, hairdressers,hairdressers,

fitness centres and entertainment like fitness centres and entertainment like film film

and TV. and TV.


TASK 7TASK 7

Design a mind map or poster whichDesign a mind map or poster whichhighlights the following points:highlights the following points:Consumer Needs and WantsConsumer Needs and WantsGoods and ServicesGoods and ServicesSectors of IndustrySectors of IndustryScarce ResourcesScarce ResourcesOpportunity CostOpportunity Cost Influences on Consumer DemandInfluences on Consumer Demand


CONSOLIDATIONCONSOLIDATION

Now complete Worksheet 1 in your Now complete Worksheet 1 in your jotters.jotters.

NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS HOW DO SMALL BUSINESSES OPERATE Consumer...

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