Welcome to

Economics
WA-10

⚚Eduardo A. ✮ Cortez A.☥

 Lesson 4

⚚Eduardo A. ✮ Cortez A.☥

⚚Eduardo A. ✮ Cortez A.☥
 ⚚Eduardo A. ✮ Cortez A.☥

⚚ What is Business? => How to Grow a Business? => Why to start a Business? ✭
 Aim = Vacation | Da
Nang by Land
📝 Itinerary ☿
1.Transportation= Rent a properly
working Van
2.Find a good Driver
3.Put enough Gasoline/Petrol
4.Find nice people to share costs/
expenses and experiences.
5.Create a good list of Activities and
Places to Visit
6.Get in the van with the participants
and start the drive
7.Check on how is the Gasoline and the What is the most
mechanics of the van exciting part of the 10
8.Arrive to the Hotel/Hostel
points outlined aside
9.Enjoy & Relax
10.Activities, etc for you?
 Always Remember to Calculate and Manage
Risks while being a S.M.A.R.T risk-taker!
What is Business?
• "Traditionally speaking, business is an entity that tries to
combine human, physical, and financial resources into
processing goods or services to respond to and satisfy
customer needs”
Nowadays, there are many businesses that apart from their head office,
they don’t have physical facilities. For example facebook, twitter, etc.
You can create a business just with your laptop and a secure internet
connection!!!
The rise of outsourcing and offshoring is making companies have their
distribution and production facilities far away from their head-offices.
 Do you know how to grow a bean 🌱 plant?

If so, what do I need to know to start growing mine?

 Key Terms
~ Economics & Business Administration ~
• Adding value is the process of • Factors of production is the collective
producing a particular good or service term for the resources needed to
that is worth more than the cost of the produce goods and services. Businesses
resources used to produce it. combine human, physical and inancial
resources in an e ective way to create
• A business can be de ined as a decision-
goods and services to meet the needs
making organization established to
and wants of consumers.
produce goods and/or provide services.
• Goods are physical products, e.g. food,
• Consumers are the people who use
clothes, furniture, cars and smartphones.
goods and services. They are not
necessarily the customers though. • Services are intangible products, e.g.
haircuts, tourism, public transport,
• Customers are the people or other
banking, insurance education, and
businesses that purchase goods and
healthcare.
services.
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Welcome to
Economics!
WA-10
Lesson 3

What does
Economics study?
⚚Eduardo A. ✮ Cortez A.☥
Economic Sciences Study:
⚚Eduardo A. ✮ Cortez A.☥

• Human behaviour.
• Interaction in social, cultural,
environmental.
• Economic and political contexts.
• Personal to global contexts.
• Opportunities and challenges for the future.
⚚Eduardo A. ✮ Cortez A.☥
⚚Eduardo A. ✮ Cortez A.☥

Explain to your peers,

in your own words,
what is Economics
Discussion: and how do you
think it can help you
to improve your life?
 Vocabulary – Key Terms
& Definitions
The economy is often spoken about as if it were something separate with a
life of its own, when in fact the economy comprises all of us.
⚚Eduardo A. ✮ Cortez A.☥
 Economics Key Terms and
Definitions
Goods
• In economics, goods are items that satisfy
human wants and provide utility, for
example, to a consumer making a purchase
of a satisfying product. A common distinction
is made between goods which are
transferable, and services, which are not
transferable.
 Economics Key Terms and
Definitions
Services
• In economics, a service is a transaction in
which no physical goods are transferred from
the seller to the buyer. The benefits of such
a service are held to be demonstrated by the
buyer's willingness to make the exchange;
using resources, skill, ingenuity, and
experience, service providers
benefit service consumers.
 Economics Key Terms and
Definitions
Interest
• Most of us are familiar with the concept of interest in our
daily lives. If we invest $100 at 10% interest for a year, at
the end of the year we will have $110.
If we waited another year we would have $121. If you
thought that we should have $120, look again. 10% of
$110 is $11, so if we add this amount to what we have, we
get $121. This phenomenon is called compounding
interest, where we get more and more money from an
investment as time goes on, even at the same interest rate
because interest is accruing based on all the money we
have now, not just what we started with.
 Economics Key Terms and
Definitions
Supply and Demand
• Consider a good that is being sold in many places across a
nation. From the perspective of a consumer/client, generally
a higher price will mean fewer units of the good are sold.
Generally a lower price will mean that more units of the
good are sold.
• From the perspective of a producer/manufacturer however,
the higher the price is, the more they will want to produce of
the good. Again, the opposite is generally true as well; the
lower the price, the less they will want to produce the good.
 Economics Key Terms and
Definitions
Markets
• A place where goods and services are exchanged. One might
imagine a bustling street full of vendors and customers or a
stock exchange full of people buying and selling stocks. These
are physical manifestations of what we call a market, but the
definition is not limited to these examples.
• Goods and services are exchanged at many levels. We can
imagine markets at a local, national, and global scale. We can
still use those first mental images, but we should be aware that
markets can span continents and cross borders.
Examples : Food Market, Hospitality Market, Education Market,
Stock Market, Health Market, Diamond Market.
 Economics Key Terms and
Definitions
Capital
• A useful definition of capital is anything that can enhance
the ability to do economically useful work . Economically
useful essentially means anything that has value to
human beings. There are many ways to produce value, so
it makes sense that there are several types of capital that
we can refer to.
Examples : Human Capital, Financial Capital, Physical
Capital, Social Capital/Partnerships/Brand
Loyalty, Natural Capital.

⚚Eduardo A. ✮ Cortez A.☥

 Activity-Keytakeaways

Write Down • Interests {study-loan

One Example of:
interests}
• Supply & Demand
{People demand
affordable motorbikes,
Honda supplies
affordable motorbikes}
• Markets {Sneakers
(sport shoes) Market,
Backpacks Market,
etc.)
• Capital {Motorbike
Honda Air-blade
125cc-2015, 100 000
dollars on corporate/
⚚Eduardo A. ✮ Cortez A.☥ personal savings, etc.}
A Day
In The Life
Of A Billionaire:
Richard Branson
 Activity-Keytakeaways

• Where the video was filmed? {1,

2, 3 places???; where?}

• Name the activities he performed

during that day in chronological
ACTIVITY ⍺ ⏱ order {What did he do during
that day?; What time did he do
✮ A Day each activity?; How much time did
he have in between activities?}
In The Life
Of A Billionaire: Richard • What skills did it seem you need,
Branson after watching the video, for
being able to perform like a good
business owner/leader/
billionaire? {Mathematical skills?,
Gaming skills? writing skills?
language skills? critical thinking
⚚Eduardo A. ✮ Cortez A.☥
skills? story-telling skills? etc.}
Topic of the Week
Global Economy

Role of Key Participants and Dependence of

Participants on Each Other

• Why and how participants in the global economy

are dependent on each other, including the activities
of transnational corporations in the supply chains
and the impact of global events on the
Australian economy.
• + Pages: 1 to 35
• + Case Study: The circular flow simulation
 The Australian Economy

• The Australian economy can be defined as the total of all activities

undertaken for the purpose of producing, distributing and consuming the
goods and services we require to satisfy our needs and wants/desires.
• We all participate in one or more of these activities so we are all part of
Australia’s economic system.
• How do you participate in the Australian economic system?
 • You are hungry and thirsty on your way
home from school, and have only $6 to
spend. A burger is going to cost $4, a drink
$3 and a small serving of fries $3. If you buy
the burger, you will have $2 change but won’t
The be able to afford a drink. You could afford a
economic drink if you buy the fries, but the fries won’t
satisfy your hunger as much as a burger
problem of would. You are facing the fundamental
economic problem of relative scarcity, and
relative you have to make a choice.
• Consumers and producers have to make
scarcity choices all the time. It is through the
totality of these choices that the economic
system attempts to satisfy as many needs
and wants as possible.
Active Learning Exercise
Food, clothing and shelter are usually considered as basic needs for all
human beings. In what circumstances might each of these be seen as
wants rather than needs? (Think about the type of food, clothing or
shelter.)

As a team, make a list of all the businesses that operate at your local
shopping centre. Group these businesses according to whether they
supply goods or services, or both.

Make a list of ten goods or services that are not supplied by

businesses at your local shopping centre. Why do you think each of
these goods or services are not available locally?
 Key
Participants:

1. Household sector
2. Business sector
3. The financial
sector
4. The government
sector
HOUSEHOLD SECTOR
• Total of all consumers in the economy.
• Every person in the economy is a consumer — we all acquire goods
and services to satisfy our needs and wants.
• Whether we consider ourselves part of the household sector or part
of the business sector depends on the economic role we are
performing at the time.

Who or when are you

part of the household When buying goods and services, we
sector and when are are part of the household sector. When at work, we
you part of the are part of the business sector.
business sector ?
 BUSINESS SECTOR
• Made up of a large number of producers, all seeking to provide goods
and services to satisfy the needs and wants of households.
• In order to do so, businesses make use of resources. Economists classify
resources into four categories: Land, labour, capital, and enterprise.
•All the raw materials and other natural resources that go into the production of goods and services.
Land: EX: minerals dug up from the earth, food crops ready for processing, timber harvested from forests, and
raw fibers such as wool or cotton.
• Human skills and effort required in the production process. Physical and intellectual skills. Relies on
Labour: the household sector. In return, businesses pay wages which are used by consumers to purchase goods
and services from the business sector.
• In economics, ‘capital’ refers to all equipment used in a production process.
Capital: • For example, an accountant uses a computer, a grab driver uses a motorbike and a smartphone, etc.
• Enterprise is the ability to recognize the demand for new goods or services, and to start up a new
Enterprise: business or expand an existing business to attempt to satisfy that demand.
 FINANCIAL SECTOR
• The household and business sectors rely on a functioning inancial sector.
BANKS.
• Money performs the following four very important functions in our economic
system:
• Medium of exchange — money allows us to pay for goods and services because it is
accepted by everyone.
• Measure of value — money allows us to put a price on the goods and services we exchange.
• Store of value — money allows us to save our income or wealth for spending at a later date
• Standard of deferred payment — money allows us to purchase goods and services on
credit,

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GOVERNMENT SECTOR
• Refers to the federal government based in Canberra, the state and
territory governments based in capital cities, and local councils across the
country.
• The other sector pay the government in form of TAXES and the
government provides them with certain goods and services.
• Those taxes help or damage the country economy; depending on how are
they managed by their leaders. If the household and business sectors
have to pay high amounts on taxes they will have to spend lees money on
products and services. Somethings that murders economy!
 • Remember: Define the
following and provide an
Empowering example of each:
Your
a) labour (3 marks)
Learning! b) resources (3 marks)
c) consumer demand (3 marks)
d) financial intermediary (3 marks)
e) Investment (3 marks)
 FIN
⚚Eduardo A. ✮ Cortez A.☥