Year 8 Economics and Business Past Paper PDF

Humanities and Social Sciences Economics and Business Year 8 Four basic economic questions Concept Development Title Allocation of Resources EQ EQ: What are the three economic...

Humanities and Social Sciences Economics and Business Year 8 Four basic economic questions Concept Development Title Allocation of Resources EQ EQ: What are the three economic questions? Keywords Key Word [headings on slides] Notes Notes Homework (Do not rule up this section until we are finished with notes): Answer EQ in Summary section Homework Learning Objective Students will be able to identify and explain the three economic questions. Success Criteria Students can identify and explain the three economic questions. Concept Development The three economic questions In Australia about 40 per cent of all businesses fail during their first four years – over half of them in their first year. This means that many potential producers are entering the marketplace, but not selling the goods or services necessary to satisfy the needs and wants of consumers. To increase profits and remain in the market, businesses must answer three economics questions. These include: 1. What to produce? 2. How to produce it? 3. Whom to produce for? Concept Development WHAT TO PRODUCE? The first economic question a business must answer is what good or service they are going to provide to consumers. The primary goal of a business is to make money (a profit). To make a profit businesses must decide what product will best meet the demands of society. Concept Development WHAT TO PRODUCE? To answer the ‘what to produce?’ economic question, businesses need to consider a number of factors. The availability of resources Competition Concept Development WHAT TO PRODUCE? CHECK FOR UNDERSTANDING THE AVAILABILITY OF RESOURCES Why does the availability of resources impact on Businesses make decisions about what to produce businesses? by researching the available resources in society. Some businesses are successful as there is an abundance of available resources (e.g., solar panels in Australia as we have plenty of available sunlight.) Some businesses are successful as they seek to provide customers with a product that is in high demand but low supply (e.g. Kailis Jewellery, a Western Australian jewellery company, supplies W.A. with pearls and gems. These pearls are in high demand as they are rare and beautiful. The high price of the jewellery reflects the low supply of the product.) Concept Development WHAT TO PRODUCE? COMPETITION Competition from businesses selling the same products can reduce the amount of income that a business can make. Depending on the market that the business is operating in, there may be many competitors or only a few. Competition can also create opportunities for businesses as they need to innovate to improve their products. CHECK FOR UNDERSTANDING Use your white boards to match the competing businesses Concept Development HOW TO PRODUCE? LABOUR VERSUS TECHNOLOGY When producing goods and services, businesses will try to keep the cost of production as low as possible to increase profit. Businesses can reduce costs by: Increasing the production so that more goods can be made using the same resources, which is known as using ‘economies of scale’. Using cheaper materials. Paying lower wages or producing the product overseas. Using machinery to replace human workers. Concept Development LABOUR VERSUS TECHNOLOGY Watch the two clips below China Is Racing to Create Factory of the Future https://www.youtube.com/watch?v=cn9BV2JRZH0 [1:22m] Australia closes its last car factory https://www.youtube.com/watch?v=r013sCUw6WM [2:18m] Concept Development FOR WHOM TO PRODUCE? TARGET MARKETS AND DEMOGRAPHICS Businesses decide who to produce for based on a target market. A target market is a specific group of customers with similar characteristics. A business can work out a target market by grouping customers based on demographic characteristics such as income, age and geographical location. Try to work out the target market of the following products. Answer the questions on your worksheet. Skill Development FOR WHOM TO PRODUCE? For each of the following target market groups, think of an opportunity (a product or a business idea) that would cater for their needs. Be prepared to share your ideas with the class. Relevance: STUDENTS pay High income earners attention to when your demographic is New parents being targeted in Diet conscious consumers advertisements! Teenagers University students Tradesman Guided Practice THE THREE ECONOMIC QUESTIONS IN A REAL WORLD SCENARIO https://www.youtube.com/watch?v=biACQCsmm5c [4:36m] Using the example of Donut Time in Brisbane, outline how the company answered the three economic questions. What to produce? How to produce? Who to produce for? Relevance VOCABULARY CHECK FOR UNDERSTANDING Ethics simply defined is You have the power! related to ideas about 1. How can consumers what is right or good. influence Ethical behaviour is business  Consumers influence businesses by creating characterized decisions? by honesty, fairness 2. Why do some demand for products. That means that every and equity. people choose to purchase from time you make a purchase you are ethical influencing the economy. businesses? Therefore, many people choose to purchase from ethical businesses that are helping people and/or the environment. As opposed to businesses that harm society and/or the environment. You have purchasing power and your choices make a difference! Lesson Closure Allocation of resources refers to how businesses divide resources and how these resources are then distributed to consumers. The three economic questions are: 1. What to produce? Businesses must consider availability of resources and competition. 2. How to produce? Businesses will try to keep the cost of production as low as possible to increase profit. 3. Whom to produce for? Businesses must select a target market. This is a specific group of customers with similar characteristics.