Chapter 1 Economic Activities PDF

This PowerPoint contains the following lessons from chapter 1… 1.Economic Activities Needs and wants The central purpose of economic activity The key economic decisions The main economic groups 2. The factors of production Understanding the nature of an economic...

This PowerPoint contains the following lessons from chapter 1… 1.Economic Activities Needs and wants The central purpose of economic activity The key economic decisions The main economic groups 2. The factors of production Understanding the nature of an economic resource The 4 factors of production land, labour, capital and enterprise 3. Making choices The basic economic problem Costs and benefits of economic choices including opportunity cost.  1.1 Economic Activity Understand the concept of wants and needs Defining the central purpose of economic activity who the key economic groups and what the key economic decision is 1.1 Economic Activity Monday 25th September 2023 TASK: Unfortunately, the world is about to end! Luckily, you have been chosen to join a secret Government initiative sending young people to colonise planet Proxima Centauri b. You have just 5 minutes to choose 15 items from the above list that you want to take with you. Discuss with your group why you have chosen them. Can you please circle your 15 items Toilet paper Plates Storage Chocolate Bowls units Clothes Cups Mobile Cat Matches phone Iron Saw Table Forks Drill Paper Radio Medicines Chairs Pyjamas Knives Make-up Rucksack Hammer Marbles Tie Hand cream Batteries Pens Music system Nails Dog Football Pans Laptop Bed Towels Books Pencils Spoons  What is Economics? Economics is the study of the allocation of scarce resources. A starting point for understanding the subject is to consider the economic problem. What is the basic economic problem? The basic economic problem is that people have an unlimited number of wants and needs but we have limited amounts of resources. What is the purpose of economic activity? Production of goods and services to satisfy the everchanging needs of society.  What is a need? With the person next to you, discuss some needs you might have. Challenge: Can you come up with a definition for NEED? NEED: Something that is needed to survive.  What is a want? Demands that fulfil the desires of consumers. In your books, write down some wants… Then you have 3 minutes to complete Activity 1 in your Course companion  Can wants and needs change over time? YE S! Over time the wants and needs of individuals is subject to change. This can be due to a range of different factors/ reasons.  The central purpose of economic activity What do we mean by central? The central purpose of economic activity is the production of goods and services to satisfy the needs and wants of society Someone will need to provide the goods and services. These are called producers and take a variety of forms: Individuals use their skills to provide goods and services Firms are groups of individuals that work together to provide goods and services Government look to meet the needs of society by providing goods and services  The key economic decisions What are the key economic decision? What to produce? Out of all the goods and services which are needed which ones should be produced? How to produce? What methods are we going to use to produce our goods and services? Who is to benefit from the good or service produced? How do you distribute things that we have so that people have access to them and use them? Imagine that you were setting up your own business, with the goal of making a profit in the future. Answer the following questions, giving a reason for your answers. 1) What would you produce? 2) How would you produce your goods or services? 3) Who would benefit from the production of your goods and services? 4) Do you think that there is a market for 1.1 Economic Wednesday 20th activity September 2023 Discuss with your partner: What is the role of producers and the government? Consumers are people that use goods and services Consumption expenditure, or consumption, is spending on goods and services by households Consumers Consumption is the largest proportion of aggregate demand in the economy Households consist of all those people living in a housing unit e.g. a flat or a house  They use the factors of production or factor inputs and turn them into factor outputs e.g. an end product, such as a car Produce Land, Labour, Capital and rs Enterprise Production is the output created by producers Government revenue is income received from a variety of sources, especially taxation Government expenditure is how government uses its income in order to fulfil its role Government Economic policy is undertaken by government in order to meet its main economic objectives Maintaining full unemployment Ensuring price stability Achieving economic growth Having a strong balance of payments position  Chapter 1: Economic Monday 9th October 2023 Activity How do all 3 of three economic groups interact? What is the relationship between different groups? Consumers, producers and government  How do the groups INTERACT with each other? Consumers buy off producers, allowing them to make a profit Consumers pay taxes to government, helping it to provide goods, and especially services, in order to benefit society Producers supply goods and services to consumers, other producers and government To do this they employ and pay people, who will become their customers Government looks to meet the needs of society To do this it will spend on goods and services that it deems appropriate Many of these will be bought from producers and supplied to consumers  1.2 Factors of production Friday 22st September 2023 Success criteria: All must be able to identify and explain the factors of production. Most will be able to explain the reward of each factor of production. Some will be able to analyse the process used within production and link the factors together. TASK: Discuss with the person next Challenge: Can you mention the materials and processes? to you, What goes into the production of a car? 1.2 The factors of production  Factors of Production There are 4 Factors of Production… Can you guess them?  Land Labour The physical and land the site The skills and numbers of on which the business is employees employed by a located. business. Natural resources a business E.G workers might use E.G: Farming, coal, oil and livestock Capital Enterprise The equipment used to The skills of people involved provide the goods and in the business to identify services, such as machinery business opportunities and and equipment. bring together resources to E.G: as a teacher I use a meet those opportunities. laptop https://www.youtube.com/watch?v=RSyvcANRaOE TASK: Complete the task in your booklets. Infrastructure: the basic foundation or underlying framework of an organization or system. In your house, the infrastructure is the system of beams, weight-bearing walls and the foundation that keeps it standing. 1) The lorry allows entrepreneurs to transport goods to different locations. Transporting goods from manufacturers to businesses to allow consumers to purchase them. 2) Roads, Parking sports, strong but light materials, Diver, Wheels. 3) A lorry transports products from  Factors of production and their rewards explained In economic theory the four factors of production are labour, land, capital and enterprise. Each of these factors gets a return for their input into production and this is called Factor Income. An individual who is An individual who employed will be able to supplies land or uses gain wages from the land will gain rent, supply of labour. which is a benefit. When a company takes a loan out, it is A good entrepreneur will expected to pay use the factors of back the total with production to make a some extra amount. profit. Hence, the factor This extra amount is income of enterprise known as interest. is profit. https://marketbusinessnews.com/financial-glossary/factor-income/  Factors of production Go to page 7 of your booklets and complete the case study. 1.3 Making choices 1.3 Making choices Wednesday 27th September 2023 Discuss with your partner: What is the main issue with having limited resources? Eventually we must make a choice between which product or service gets produced.  Opportunity cost… What is it? The sacrifice we make whenever we decide to do anything. For example, if you go out this evening with friends, you have sacrificed the work/ revision. https://www.youtube.com/watch?v=x-hYzRncxTc Cost isn’t always about money, in this instance. Another example can be going out all weekend has cost you your weekend. 1.3 Making Thursday 28th September 202 choices How and why choices are made, and how costs and benefits can be weighed up to make a choice Assume that you have £20 TASK: Why do we make choices? to spend at the weekend and you are looking to spend all of your money. Economic groups make choices based on the Write a list of goods or satisfaction gained from them services that you would spend your money on in For consumers this will take into account the price of order to maximise your the good or service satisfaction or utility. Justify your choices in Another term for satisfaction gained from consumption terms of maximising is utility satisfaction. Economic groups try to maximise their utility when making choices For example, if I gain more satisfaction from drinking apple juice rather than orange juice, it would make sense to buy apply juice  How costs and benefits can be weighed up to make a choice The costs of making a choice can be measured against the benefits gained from it Resources have a range of uses e.g. metal to make a car or tin cans Therefore, people have to choose from a range of alternatives Trade-offs are when a choice is made above all other alternatives However, people often look at the best alternatives, disregarding others Opportunity cost is the benefit foregone of the next best alternative In other words, the benefit lost from choosing my best alternative over my second-best Complete Activity 5 in your course companion.