yr 8 - business + economics

Goods: Something we can see and touch. E.g. water bottle.

Service: A service or act performed for you. E.g. hair dresser, accountant

Need: Something essential for survival. E.g. water, food, shelter and air

Want: Something desirable but not essential. E.g. jewellery, phones

Supply: the total amount of a specific good or service that is available to consumers

23.2 Participants in the market system

Consumers and producers

• Consumers (buyers) and producers (sellers) meet up in a market.

• This is where trade takes place.

• Markets do not necessarily have to be in person and can be online.

• Producers provide the goods and sellers exchange goods with money

• Everybody is a consumer and people who are employed are also considered consumers

• People satisfy their needs and wants by working to earn a wage

What was the first type of business?

Hunters and gatherers who hunted and collected food and traded with it.

How did people ‘pay’ for their goods before we had money?

People ‘payed’ by bartering which involved a trade of goods. E.g. people bartered clothes for food.

When was money invented?

Money was invented around 1000BC in ancient china.

What is an entrepreneur?

A person who sets up a business or businesses

Entrepreneur take on financial risks in the hope of making a profit

Innovation:

Innovation is the process of creating a new or significantly improves good, service or process.

Invention:

Invention refers to the development of something that is totally new.

Innovation and invention both result in the creation of something unique.

Business opportunity

Ideas for new products or development of and improvement to existing, will often provide the opportunity for the establishment of a new business.

business operation can arise from:

• recognising and taking advantage of market opportunities

• identifying changing customers needs

• technological advancements.

How does the economy work?

• Households are the consumers of the products and services produced by business

• Household provide businesses with the resources (such as labour) that they require

• Households provide resources to businesses and earn an income (such as salaries and wages) In exchange businesses produce goods and services which they sell to households.

VERY IMPORTANT

Resources, goods and services flow one wat. These are called Ral flows because they are physical items.

Here is the completed circular flow diagram with both the real flow (red) and money flow(green).

1. specialised occupations

2. bartering

3. market economy

4. the ability of some people having a specialised skill

5. people wanting things