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MONEY – The basic problem It doesnt grow on trees! Money Works: Money, customers and business.

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Presentation on theme: "MONEY – The basic problem It doesnt grow on trees! Money Works: Money, customers and business."— Presentation transcript:

1 MONEY – The basic problem It doesnt grow on trees! Money Works: Money, customers and business

2 One world SCARCITY Scarce resources Distributed differently around the world Many people have basic needs unmet Money Works: Money, customers and business

3 NEEDS Food Water Clothing Shelter Safety Money Works: Money, customers and business

4 What do you want? What do you need? WANTS Not essential for survival Money Works: Money, customers and business

5 CHOICES Limited incomes Cant have it all Choose between goods and services To buy or not to buy Best value (A) (B) Money Works: Money, customers and business

6 Have you ever made a difficult choice? What influenced your decision? THINKING ABOUT CHOICES… Governments have to make difficult decisions every day Can you think of examples? Do you always get value for money? How do you make your money go further? Money Works: Money, customers and business

7 Businesses provide goods and services. Compete with each other for customers. Compete on price and other factors, e.g. quality, customer service, brand, prestige. Businesses make a profit by: - getting the most revenue they can for their goods and services - keeping their costs as low as possible. BUSINESS & CHOICE Money Works: Money, customers and business

8 MONEY – The basic problem It doesnt grow on trees! Money Works: Money, customers and business

9 Meeting basic needs making more than they need EARLY SOCIETIES developing skills Money Works: Money, customers and business

10 Farmer one produces too much wheat for his family. TRADE - BARTER Barter - what willing to exchange for what Farmer two produces too much cheese. Money Works: Money, customers and business

11 Do you want what I have? Have you got what I want? How can we find each other? Can we agree an exchange? Could someone give me a better exchange? I cant find someone who wants to swap with me! Just too difficult!!! PROBLEM? Money Works: Money, customers and business

12 That we can all use and recognise That is always worth the same That can be divided up so we know how many parts make up one whole That is easy to carry around That is hard-wearing, as we will pass it around Then we can use this to pay each other for goods and services! WHAT WE NEED IS SOMETHING… Money Works: Money, customers and business

13 Medium of exchange Unit of account Store of wealth MONEY!!! Money Works: Money, customers and business

14 A farmer takes his surplus wheat to the market. DEVELOPING MARKETS He buys the other food he needs using the money – not just cheese! He sells this for money. He is now a producer of his goods and is a supplier to the market. Money Works: Money, customers and business

15 The farmer makes very good quality wheat but cant produce enough to meet the quantity his customers want and can pay for. As customers are demanding more than he can supply, he finds customers are prepared to pay more. The price goes up. DEVELOPING MARKETS Money Works: Money, customers and business

16 The farmer decides to specialise in producing more wheat, as he is particularly good at growing this. As he gets better he finds he can reduce how much it costs to produce his wheat. He is so successful and getting such a high price, other farmers decide it might be a good idea to look at producing more wheat too. DEVELOPING MARKETS Money Works: Money, customers and business

17 Now several farmers bring their produce to the market. Customers have choice. What will the farmer have to do to keep his customers? DEVELOPING MARKETS Money Works: Money, customers and business

18 Market – buyers and sellers come together Price – determined by demand and supply Demand – the amount buyers are willing and able to pay Supply – the quantity suppliers are willing to provide at a certain price A SIMPLE MARKET Money Works: Money, customers and business Supply demand


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