Needs/Wants & Goods/Services
What do we call something that is essential for survival, such as food, water and shelter?
NEED
What economic problem occurs because people have unlimited wants but limited resources?
SCARCITY
What do individuals provide to businesses in return for wages?
LABOUR
What do we call a person who purchases or uses goods and services?
A CONSUMER
A toy shop sells a teddy bear for $25. Is the teddy bear a good or a service?
A GOOD
A student purchases a new pair of designer sunglasses. Is this a need or a want?
WANT
Why can't a person always purchase everything they want?
THEY HAVE LIMITED RESOURCES SUCH AS MONEY AND TIME
What do businesses pay individuals in return for their work?
WAGES OR SALARIES
What are the TWO main things businesses provide to consumers?
GOODS AND SERVICES
A farmer experiences a poor harvest and produces fewer potatoes than usual. What has happened to the supply of potatoes?
SUPPLY HAS DECREASED (REDUCED)
A plumber visits a house to repair a leaking tap. Is this a good or a service?
A SERVICE
Sophie has $20. She chooses to buy a book instead of going swimming with friends. What is her opportunity cost?
GOING SWIMMING WITH HER FRIENDS
What do we call the money individuals spend when purchasing products from businesses?
CONSUMER SPENDING
A local bakery purchases flour, employs staff and sells bread. Identify who the consumers are.
PEOPLE WHO PURCHASE THE BREAD
A cinema increases its ticket prices from $12 to $18. Some customers decide not to attend. Explain why.
HIGHER PRICES MAKE GOING TO THE CINEMA LESS AFFORDABLE - SO THEY DECIDE NOT TO GO.
A supermarket sells fresh vegetables and also offers home delivery. Identify one good and one service.
VEGETABLES ARE GOODS...HOME DELIVERY IS A SERVICE
A business has enough money to purchase either a new delivery vehicle or upgrade its kitchen equipment. It chooses the vehicle. Explain its opportunity cost.
KITCHEN EQUIPMENT UPGRADE IS THE OPPORTUNITY COST
Explain how money moves between individuals and businesses in the circular flow model.
Businesses pay wages to individuals, who then spend money purchasing goods and services from businesses.
Explain TWO ways a local business contributes to its community.
A sporting goods shop has too many footballs in stock and not enough customers are buying them. Suggest TWO strategies the business could use to increase sales.
REDUCE PRICES, ADVERTISE, OFFER DISCOUNTS OR RUN A SPECIAL PROMOTION
Explain why a mobile phone can be considered both a need and a want, depending on the person and situation.
IT MAY BE NECESSARY FOR WORK OR SAFETY. BUT AN EXPENSIVE UPGRADED MODEL USED FOR GAMES AND SOCIAL MEDIA WOULD BE A WANT.
Explain why opportunity cost is important when individuals and businesses make economic decisions.
THEY MAKE INFORMED DECISIONS AND UNDERSTAND THAT BY CHOOSING ONE OPTION THEY ARE GIVING UP ANOTHER CHOICE.
Imagine individuals suddenly stop spending money at local businesses. Explain TWO possible consequences for businesses and the economy.
Businesses may experience reduced sales and profits. They may reduce production, employ fewer workers or close, affecting household incomes and further spending.
A local café notices that fewer customers are visiting. Suggest TWO ways the café could encourage customers to return.
THEY COULD INTRODUCE A LOYALTY PROGRAM OR PROVIDE SPECIAL OFFERS OR IMPROVE THE MENU
A local restaurant experiences rising food costs, fewer customers and increasing competition. Explain TWO challenges this creates and suggest TWO ways the business could respond.
CHALLENGED INCLUDE REDUCED PROFITS & LOWER SALES. TWO SOLUTIONS MAY BE FINDING CHEAPER SUPPLIERS, CHANGING THE MENU PRICES OR HAVING PROMOTIONS