Thanks to visit codestin.com
Credit goes to www.scribd.com

0% found this document useful (0 votes)
19 views39 pages

Pob Week 1 Notes

The document outlines a lesson plan for an online class on the Principles of Business, focusing on key business terms, factors of production, and the concept of barter. It includes learning objectives, definitions of essential terms like business, entrepreneurship, profit, and loss, as well as the advantages and disadvantages of specialization and division of labor. Additionally, it discusses factors affecting the supply of labor and how money can address the limitations of barter.

Uploaded by

shivanancoo5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
0% found this document useful (0 votes)
19 views39 pages

Pob Week 1 Notes

The document outlines a lesson plan for an online class on the Principles of Business, focusing on key business terms, factors of production, and the concept of barter. It includes learning objectives, definitions of essential terms like business, entrepreneurship, profit, and loss, as well as the advantages and disadvantages of specialization and division of labor. Additionally, it discusses factors affecting the supply of labor and how money can address the limitations of barter.

Uploaded by

shivanancoo5
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 39

• SCHOOL: CTS COLLEGE PRIVATE

SECONDARY

PRINCIPLES • SUBJECT: PRINCIPLES OF BUSINESS


OF
BUSINESS • TOPIC: KEY BUSINESS TERMS
ONLINE
CLASSES • LECTURER: NARACE RAMDASS

• WEEK: 9/9/24
1
TOPIC
TRACKER

• TOPIC: Nature of Business SUB-


TOPICS
• Section 1 of the Principles of 1. Key Business
Business Terms
Syllabus
2. Factors of
Production
3. Barter
LEARNING OBJECTIVES

• BY THE END OF THIS SESSION STUDENTS SHOULD BE ABLE TO:


• 1. Identify and Explain Key Business Terms
• 2. Identify and Explain the Factors of Production
• 3. Define and Identify the advantages and disadvantages of Specialization/
Division of labour.
• 4. Explain the term Barter and state its advantages and disadvantages
• 5. State how money can be used to overcome the problem of barter
CONTENT
KEY BUSINESS TERMS
• BUSINESS: - An organization or economic system where goods and services are exchanged
for one another or for money. Every business requires some form of investment and enough
customers to whom its output can be sold on a consistent basis in order to make a profit.

• ENTREPRENEURSHIP: - A person who takes the initiative is someone who "makes things
happen". He or she tends to be decisive. A business opportunity is identified and the person
does something about it. Showing initiative is about taking decisions and being bold -not
everyone is like that.
KEY BUSINESS TERMS CONT’D

• Risk-taking is slightly different. In business there is no such thing as a "sure fire bet". All
business investments carry an element of risk - which is the chance or probability that
things will go wrong. At the worst, the risk of an enterprise might mean the person making the
investment loses all his/her money or becomes personally liable for the debts of the business
• The trick is to take calculated risks, and to ensure that the likely returns from taking a risk
are enough to make the gamble worthwhile.

• Someone who shows enterprise is an "entrepreneur".


KEY BUSINESS TERMS CONT’D

• PROFIT: - Profit is a financial benefit that is realized when the amount of revenue gained from a
business activity exceeds the expenses, costs and taxes needed to sustain the activity.
•Any profit that is gained goes to the business's owners, who may or may not decide to spend it on
the business.

• LOSS: -is the result that occurs when expenses exceed the income or total revenue produced for a
given period of time
JUNE 2015#1

 Define each of the following terms


1. Profit ( 2marks)
2. Enterpreneurship (2marks)
JUNE 2015#1 ANSWER

• PROFIT: - Profit is a financial benefit that is realized when the amount of revenue
gained from a business activity exceeds the expenses, costs and taxes needed to sustain the
activity.
•Any profit that is gained goes to the business's owners, who may or may not decide to
spend it on the business.

 ENTREPRENEURSHIP: - A person who takes the initiative is someone who


"makes things happen". He or she tends to be decisive. A business opportunity is
identified and the person does something about it. Showing initiative is about taking
decisions and being bold -not everyone is like that.
KEY BUSINESS TERMS CONT’D

• TRADE: - Trade is a basic economic concept involving the buying and selling of goods and
services, with compensation paid by a buyer to a seller, or the exchange of goods or services
between parties.
• ORGANIZATION: - A business organization is an individual or group of people that collaborate
to achieve certain commercial goals. Some business organizations are formed to earn income for
owners. Other business organizations, called nonprofits, are formed for public purposes
• ECONOMY: - Economy is the large set of inter-related production and consumption activities that
aid in determining how scarce resources are allocated. This is also known as an economic system.
KEY BUSINESS TERMS CONT’D

• The economy encompasses all activity related to production, consumption and trade of goods and
services in an area. The economy applies to everyone from individuals to entities such as
corporations and governments. The economy of a particular region or country is governed by its
culture, laws, history, and geography, among other factors, and it evolves due to necessity. For this
reason, no two economies are the same.

• COMMODITY: - A reasonably interchangeable good or material bought and sold freely as an


article of commerce. Commodities include agricultural products, fuels, and metals and are traded in
bulk on a commodity exchange or spot market
KEY BUSINESS TERMS CONT’D

•PRODUCER: - A producer is someone who creates and supplies goods or services. Producers
combine labor and capital, called factor inputs or factors of production, in order to make a product or
offer a service.
• Businesses called "firms"are the main examples of producers and are usually what economists
have in mind when talking about producers.
•However, governments are producers of some kinds of services-such as police services, defense,
public schools, and mail delivery-and sometimes goods, such as when a government owns the oil
fields and oil production.
KEY BUSINESS TERMS CONT’D

• CONSUMER: - A consumer is a person or organization that uses economic services or


commodities. Consumers are vital for a firm’s survival.

•EXCHANGE: - An exchange is a marketplace in which securities, commodities, derivatives and


other financial instruments are traded. The core function of an exchange is to ensure fair and orderly
trading, as well as efficient dissemination of price information for any securities trading on that
exchange. Exchanges give companies, governments and other groups a platform to sell securities to
the investing public.
KEY BUSINESS TERMS CONT’D

• GOODS: - A commodity, or a physical, tangible item (can be seen and touched) that
satisfies some human want or need, or something that people find useful or desirable and
make an effort to acquire.
• SERVICES: - work performed in an expert manner by an individual or team for the benefit of its
customers, it involves intangible products, such as accounting, banking, consulting, cleaning,
landscaping, education, insurance, treatment, and transportation services.
KEY BUSINESS TERMS CONT’D

•CAPITAL – Capital refers to financial assets or the financial value of assets, such as funds held in deposit accounts, as well as
the tangible machinery and production equipment used in environments such as factories and other manufacturing facilities.

•FIXED CAPITAL is that portion of the total capital outlay that is invested in fixed assets (such as land, buildings, vehicles, plant
and equipment), that stay in the business almost permanently • or at the very least, for more than one accounting period.

•CIRCULATING CAPITAL The portion of an organization's investment that is continually used and replenished in ongoing
operations. Circulating capital can consist of operating expenses, raw material stock, inventories of finished goods or physical
capital on hand.
Jan 2019 #1

 (a) Define the term ‘capital’ as a factor of production and state TWO
examples. (4marks)
Jan 2019 #1 ANSWER

 CAPITAL: - Capital refers to financial assets or the financial value of assets, such as
funds held in deposit accounts, as well as the tangible machinery and production
equipment used in environments such as factories and other manufacturing facilities.
 Examples of, capital includes facilities, such as the buildings used for the production and
storage of the manufactured goods.
FACTORS OF PRODUCTION

• Factors of production are an economic term that describes the inputs that are used in the production
of goods or services in order to make an economic profit.

• THERE ARE 4 FACTORS OF PRODUCTION:


• 1. L AND
• 2. LABOUR
• 3. CAPITAL
• 4. ENTERPRISE/ ENTREPRENEURSHIP
FACTORS OF PRODUCTION CONT’D

• FACTOR OF • FACTOR
PRODUCTION REWARD
• 1. L AND • RENT
• 2. LABOUR • WAGES
• 3. CAPITAL • INTEREST
• 4. ENTERPRISE • PROFIT
FACTORS OF PRODUCTION CONT’D

• Land represents all natural resources, such as timber and gold, used in the production of a good.

•Labour includes all of the work that laborers and workers perform at all levels of an
organization, except for the entrepreneur.

• The entrepreneur is the individual who takes an idea and attempts to make an economic profit
from it by combining all other factors of production. The entrepreneur also takes on all of the risks
and rewards of the business.
• Capital is made up of all of the tools and machinery used to produce a good or service.
SPECIALIZATION AND DIVISION OF LABOUR

• SPECIALIZATION: - Specialization is a method of production where a business, area or


economy focuses on the production of a limited scope of products or services to gain greater
degrees of productive efficiency within an overall system.
• It is a situation where different persons do different jobs in which they best suited for.

•DIVISION OF LABOUR: the separation of a work process into a number of tasks, with each
task performed by a separate person or group of persons. It is most often applied to systems of mass
production and is one of the basic organizing principles of the assembly line. Breaking down
JUNE 2015 #1

 Define the term specialization (2marks)


JUNE 2015 #1 ANSWERS

• SPECIALIZATION: - Specialization is a method of production where a business,


area or economy focuses on the production of a limited scope of products or
services to gain greater degrees of productive efficiency within an overall system.

 It is a situation where different persons do different jobs in which they best suited
for.
FACTORS TO CONSIDER BEFORE
IMPLEMENTING SPECIALIZATION AND
DIVISION OF LABOUR
• 1. EXTENT OR SIZE OF THE MARKET: if the demand for the product is small, then
there would be no need to for a firm to separate its tasks.

• 2. THE COST OF CAPITAL EQUIPMENT: machinery can be very expensive for a firm to
employ in the production process hence if the cost of capital equipment is too high then
specialization will not take place.
• 3. NATURE OF THE PRODUCT: some products require special skill and attention e.g.

an artist, a surgeon and thus cannot be mass produced.


SPECIALIZATION/DIVISION OF LABOUR
CONT’D

ADVAN TAG DISADVANTAG


ES
• 1. Increase in Productivity: ES
• 1. Monotony:

• 2. The Right Man in the Right Place: • 2. Lack of responsibility:


• 3. Lack of job pride:
• 3. Dexterity and Skill:
• 4. Too much interdependence:
• 4. Inventions are facilitated:
• 5. Limited market:
• 5. Saving in Time:

• 6. Economy in the Use of Tools:

• 7. Use of Machinery Encouraged:


FACTORS AFFECTING THE SUPPLY OF LABOUR

• 1. The real wage rate on offer in the industry itself - higher wages raises the prospect of
increased factor rewards and should boost the number of people willing and able to work

• 2. Overtime: Opportunities to boost earnings come through overtime payments,


productivity•
• related pay schemes, and share option schemes

• 3. Substitute occupations: The real wage rate on offer in competing jobs affects the wage and
earnings differential that exists between two or more occupations. For example an increase in the
earnings available to trained plumbers and electricians may cause some people to switch their jobs
FACTORS AFFECTING THE SUPPLY OF LABOUR
CONT’D
•4. Barriers to entry: Artificial limits to an industry's labour supply (e.g. through the introduction
of minimum entry requirements) can restrict labour supply and force pay levels higher - this is the
case in professions such as legal services and medicine where there are strict "entry criteria"

• 5. Improvements in the occupational mobility of labour: For example if more people are trained
with the necessary skills required to work in a particular occupation.
FACTORS AFFECTING SUPPLY OF LABOUR
CONT’D
•6. Non-monetary characteristics of specific jobs - include factors such as the risk with different
jobs, the requirement to work anti-social hours or the non-pecuniary benefits that certain jobs
provide including job security, working conditions, opportunities for promotion and the chance to
live and work overseas, employer-provided in-work training, employer-provided or subsidized
health and leisure facilities and other in-work benefits including occupational pension schemes.

• 7 .Net migration of labour -A rising flow of people leaving a country to live abroad will
significantly
reduce the supply of labour in a country.
JUNE 2018 #1 (B)

 (b) Identify TWO factors that can affect the supply of labour to a
business.
JUNE 2018 #1 (B) ANSWERS

 TWO factors that can affect the supply of labour to a business are;
• 1. The real wage rate on offer in the industry itself - higher wages raises the
prospect of increased factor rewards and should boost the number of people willing
and able to work

• 2. Overtime: Opportunities to boost earnings come through overtime payments,


productivity related pay schemes, and share option schemes
• Barter is the exchange of goods and services
for goods and services without the
BARTER
use of money.
BARTER CONT’D

ADVANTAGES DISADVANTAGES
• 1. It facilitated trade without the use of • 1. Double coincidence of wants-
money. this is where a person first has to find
• 2. Allowed a person to get what they someone who had something that he
wanted and perhaps did not produce. wanted and is willing to accept what he
• 3. Made use of surplus goods. had to offer.
DISADVANTAGES OF BARTER CONT’D

• 2. Deciding on a common value- e.g. how many corn is worth one sheep.

• 3. Indivisibility- goods were homogenous and could not be broken down into
smaller
quantities.

• 4. Some animals would die after the long journey.


HOW CAN MONEY BE USED TO SOLVE
THE PROBLEMS OF BARTER
• Use of money overcomes the drawbacks of barter system of exchange in the following
manner:
• (i) With the introduction of money, double coincidence of wants is no longer needed.
Instead of finding someone to exchange with, now you pay for the item and that person
then buys what they want.
• (ii) Money facilitates storage of value which is difficult in barter system.
• (iii) Money facilitates satisfaction of wants even in smaller units which is not possible in
barter system.
SUMMARY OF
POINTS DISCUSSED TODAY
• Key Business Terms : Business, Enterprise, profit, Loss,Trade,
Commodity, Capital,.
• Factors Of Production
• Factors Affecting the Supply of labour
• Specialization/ Division of labour
• Factors to consider before implementing Specialization/Division of
labour
• Barter
• How can money overcome the problems of barter
Home Work
PRACTICE
EXERCISES
PRACTICE EXERCISES
CONT’D
1) Barter is BEST described as the
A. Purchase of goods and services using cheques
B. Process of exchange involving the use of money
C. Exchange of goods and services using notes and coins
1) Exchange of goods and services without the use of money

2) The term ‘division of labour’ can be defined as the


A. Organization of tasks in production
B. Assembling goods for distribution
C. Separation of tasks to complete a job
D. Employment of different types of workers
PAST PAPER
QUESTION JAN
2010 #1 (A)
• 1. Define the term Barter ( 2mks)
• 2. State 2 problems associated with Barter (4mks)
• 3. Explain 2 ways in which the use of money can overcome the problems
associated with
barter (4mks)
TOTAL 10 MARKS
NEXT WEEKS
TOPIC
• Money
• Instruments of trade
END OF CLASS
THANK YOU ALL FOR
ATTENDING

You might also like