1. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS HOW DO SMALL BUSINESSES OPERATE Consumer Needs, Wants and Choices

2. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS LEARNING INTENTIONS/SUCCESS CRITERIA Learning Intentions: I understand what businesses do Success Criteria: I can identify and I can identify and describe the different needs and wants that businesses satisfy I can identify and describe the different goods and services that business provide I can identify and describe the different goods and services that business provide I can identify and describe the Sectors of Industry in which goods and services are provided. I can identify and describe the Sectors of Industry in which goods and services are provided. I can describe how scare resources leads to opportunity cost and what influences consumer demand I can describe how scare resources leads to opportunity cost and what influences consumer demand

3. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS IMAGINE … You are on a plane heading for Australia which develops a fault. The Captain announces that he will crash land the plane on a deserted island in the middle of the ocean. You do not know whether or not an emergency distress signal (May Day) was sent!

4. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS TASK 1 Working on your own and without any discussion with others, make a list in your jotters of 10 items that you would like to take with you. (This list can include anything you want other than items that would help you leave the island eg an inflatable boat or a long range radio).

5. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS Task 2 In groups, exchange information about the contents of each person’s list and why they chose their items. Working together, agree a ‘group’ list containing 10 items. Unfortunately, there is only enough time to gather together 5 items and not 10. Following discussion, agree the 5 items to be taken. Explain what influenced your choices.

6. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS GOOD NEWS! Having survived on the deserted island, some good news! You have just received a letter stating that a relative that you have never met has left you £5,000.

7. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS Task 3 Working on your own, make a ‘wish list’ to show what you would do with the money. Bad news! A mistake was made in the letter and the amount that you will receive is only £500. Revise your wish list so that it contains no more than 5 items costing less than £500 in total. In groups, exchange information about your wish list contents and the items you ‘gave up’.

8. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS Task 4 Suggest reasons why the items chosen when leaving the plane and those in the wish lists were different. Exchange views on what would have happened had the items chosen for the island and the wish lists been swapped. Explain why different people value different things in different ways and if this is a good or bad thing. Exchange views on whether one person’s list was better than others.

9. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS Task 5 For each of the following situations explain why the choices made by each of the people involved might be different. A family with 2 children and a single person are buying a car A family with 2 children and a single person are buying a car Suggest 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 a 60s band live An elderly man and a teenager get the chance to see a 60s band live Suggest how each person might view this opportunity

10. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS How are Individuals’ Choices Met? ANSWER – BY BUSINESSES! So, we have established that we have NEEDS (items we need to survive (Food, Water, Shelter, Clothing, Warmth) and we also have WANTS. However, our wants are unlimited but the resources that make our wants are not.

11. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS TASK 6 - SCARCE RESOURCES In pairs, make a list in your jotters of the resources that you think are scarce. Here are a few suggestions – do you have any more? TimeMoney Oil, Gas Coal and Electricity WheatBarleyVegetables FishMeatCotton/Wool

12. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS HOW DO WE SOLVE THIS PROBLEM When something is scarce, meaning that we can’t have everything that we want, what do we as consumers do? We make CHOICES. However, this usually involves giving something up in order to get the item that gives us the most satisfaction. The cost of choosing one thing is what we gave up to get it. This is known as the OPPORTUNITY COST.

13. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS A successful business … Must try to provide goods and services that we (CONSUMERS) are willing and able to buy in large quantities (ie they have enough money to buy it and are willing to give up other things to do so). Must try to provide goods and services that we (CONSUMERS) are willing and able to buy in large quantities (ie they have enough money to buy it and are willing to give up other things to do so). Different things influence the demand that each of us has for individual products and services.

14. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS What Influences Consumers? Fashion and Taste eg what fashion and styles are popular Fashion and Taste eg what fashion and styles are popular Price of the product or service eg the higher the price to be paid, the higher the Opportunity Cost in terms of things given up to get it Price of the product or service eg the higher the price to be paid, the higher the Opportunity Cost in terms of things given up to get it Price of other products and services eg is it a bargain or good value for money? Price of other products and services eg is it a bargain or good value for money? Income we have eg we can only buy the things that we can afford once our NEEDS have been taken care of. Income we have eg we can only buy the things that we can afford once our NEEDS have been taken care of.

15. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS GOODS AND SERVICES Challenge! In pairs, think of as many words or phrases as possible you could use to describe goods and services.

16. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS GOODS CAN BE … Durable – last for a long time eg a car Non-durable – ie may be used up quite quickly eg a sandwich Tangible – they have a physical presence and we can see and touch them Consumer – sold to people (consumers) rather than other businesses Capital – used by businesses to make consumer goods and other capital goods eg production equipment.

17. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS SERVICES CAN BE … Intangible – we cannot touch them eg servicing of a car Non-durable – they are used up quickly eg going to the cinema to watch a film Durable – last for quite a long time eg insurance will last for one year at a time.

18. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS Sectors of Industry Goods are produced in the Primary and Secondary Sectors of Industry. Services are provided in the Tertiary Sector of Industry.

19. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS PRIMARY SECTOR OF INDUSTRY Businesses which exist in the Sector Businesses which exist in the Primary Sector of Industry are those that are concerned with using natural resources such as farming, oil drilling, mining, fishing, and forestry. In other words these businesses are concerned with growing products or extracting resources from the ground.

20. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS SECONDARY SECTOR OF INDUSTRY Businesses which exist in the Sector of Businesses which exist in the Secondary Sector of Industry are concerned with the manufacturing of products. Manufacturing businesses take the raw materials from other industries in the Primary Sector and convert them into different products. For example Kellogg’s will purchase crops from farmers to manufacture breakfast cereals.

21. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS TERTIARY SECTOR OF INDUSTRY Businesses which exist in the Sector Businesses which exist in the Tertiary Sector do not produce a product. They are concerned with providing services like banking, tourism, beauticians, hairdressers, fitness centres and entertainment like film and TV.

22. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS TASK 7 Design a mind map or poster which highlights the following points: Consumer Needs and Wants Consumer Needs and Wants Goods and Services Goods and Services Sectors of Industry Sectors of Industry Scarce Resources Scarce Resources Opportunity Cost Opportunity Cost Influences on Consumer Demand Influences on Consumer Demand

23. NAT 4 BUSINESS IN ACTION NAT 5 UNDERSTANDING BUSINESS CONSOLIDATION Now complete Worksheet 1 in your jotters.