1. Understand the “Basic Economic Problem”
Explain the term Opportunity Cost
Give an example of Opportunity Cost
Reconfirm understanding of Needs, Wants, Goods and Services

2. Scarcity and Choice
There are two main categories of resources:
1. Physical or natural resources - oil, climate, minerals, forests, fisheries, etc.
2. Human resources - people and their various skills
If we were to take stock of the world’s existing bundle of resources we would find that there are severe limitations to its ability to meet our infinite wants.
In other words, resources are scarce – there are not enough to go around.

3. "The Economic Problem" To Buy Or Not To Buy That Is The Question
We can’t always have everything we want. Sometimes we have to make a choice. This is known as “ ”
: the next best option we could have chosen instead.

4. Example
Mr and Mrs Jones have saved £1,000 since Christmas. They hoped to use the money to go on holiday but the roof of their house has now started to leak. They cannot afford both; to go on holiday and to repair the roof…… a choice has to be made!

5. In the same way as individuals are forced to make choices due to scarce resources, businesses and governments also have to make decisions.
Write down your own example of when you have had to make a choice and have chosen one thing over another.

6. Recap of Key Terms Understand what a business is
Define a NEED and give examples
Define a WANT and give examples
Define a GOOD and give examples
Define a SERVICE and give examples
Explain the term OPPORUNITY COST

7. TASK: Teacher Assessed Exercise [25 marks]
Why do Businesses exist in the world? [2]
What is meant by “scarce resources”? [1]
Write down 5 resources that are scare in the world. [3]
Mr Spencer has £200 saved in his building society account. He wants to buy a washing machine (costing £199.99) and a colour TV (costing £189.99)
What can Mr. Spencer afford to buy with his saving? [2]
Give 2 reasons why he might want to buy the washing machine [4]
What is meant by “opportunity cost” [2]
What is the opportunity cost to Mr. Spencer of buying a washing machine? [2]
Why does Mr. Spencer face the “basic economic problem”? [3]
What does the word “market” mean in Business Studies? [2]
In any “market” there are two groups.
Who are they? [2]
What do they do in the market? [2]

8. List and define the 4 factors of production
Identify and give examples of the 4 factors of production
State the importance of Entrepreneurs