Bee G7 Mie Book

7
GRADE
Business and
Entrepreneurship
Education (BEE)
Professor Vassen Naëck - Head Curriculum Implementation,Textbook Development and Evaluation
BUSINESS AND ENTREPRENEURSHIP EDUCATION (BEE) PANEL
Roodradeo Beefun - Coordinator, Senior Lecturer, MIE

Vandana Tulsidas-Veeraragoo - Senior Lecturer, MIE
Dr Bibi Nazeerah Sheik Abbass - Senior Lecturer, MIE
Manusha Jeetun-Hurreesingh - Educator
Chandreeka Dreepaul - Educator
Toolsee Daby (Mr) - Educator
Jeetendra Dutt Narain - Educator
Bibi Husna Noor Oozeer-Boodhoo - Educator
Design
Nishi Manic - Graphic Designer, MIE
© Mauritius Institute of Education (2021)
ISBN: 978-99949-44-60-6
Acknowledgement
The Business and Entrepreneurship Education (BEE) textbook panel wishes to thank:
- Shalini Jagambal Ramasawmy (Senior Lecturer, MIE) for proof reading.
Consent from copyright owners has been sought. However, we extend our apologies to those we might have overlooked.
All materials should be used strictly for educational purposes.
ii
Foreword
As the first cohort to embark on the Nine Year Continuous Basic Education at secondary level, we are
pleased to offer you a new series of Grade 7 textbooks. These textbooks have been designed in line
with the National Curriculum Framework (NCF) and syllabi for Grades 7, 8 and 9 − documents that
offer a comprehensive notion of learning and teaching with regard to each subject area. These may be
consulted on the MIE website, www.mie.ac.mu.
This set of textbooks aims at providing a smooth transition from Grade 6 so that learners gradually
get initiated into the requirements of secondary schooling. As per the philosophy propounded by the
NCF, the content and pedagogical approach, as well as the activities, have been crafted to allow for an
incremental and continuous improvement of the learners’ cognitive skills. The content is contextual and
based on the needs of the Mauritian learners. Care has been taken to provide the basics that should
help every student develop key competencies, knowledge, skills, attitudes and values that would make
him or her a successful learner for the grades beyond. The comments and suggestions of a variety of
stakeholders have been kept in mind. We are especially appreciative of those made by educators who
have been part of our validation panels, and whose suggestions emanate from long standing experience
and practice in the fiel .
The production of this series of textbooks, within a relatively short period of time, has been a challenge
to the writers who have invested a considerable amount of time, effort and energy into the process.
I would therefore wish to thank all those who have been part of the whole process for the time they
devoted to it and their perseverance. The panel coordinators are to be commended for their leadership
and insistence on maintaining the standard and quality of the textbooks, while ensuring that the
objectives of the National Curriculum Framework are translated in the content.
Every endeavour involves a number of dedicated, hardworking and able staff whose contribution
needs to be acknowledged. Professor Vassen Naëck, Head Curriculum Implementation and Textbook
Development and Evaluation, had the very demanding task of ensuring that all panel leaders are
adequately guided with respect to the objectives of the NCF, while ascertaining that the instruction
designs are appropriate for the age group being targeted. I also have to acknowledge the efforts of the
Graphic Artists and the Graphic Unit for putting in much hard work to ensure that MIE publications have
a distinctive quality that singles them out. My thanks go equally to the support staff who have worked
hard to ensure that every one receives the necessary support and work environment that is conducive
to a creative endeavour.
I am thankful to all those who provided the support, both within and outside the MIE, and to the Ministry
of Education, Human Resources, Tertiary Education and Scientific Research for giving us the opportunity
to be part of the whole reform process.
Dr O Nath Varma
Director
Mauritius Institute of Education
iii
Preface
Business and Entrepreneurship Education (BEE) has emerged as a new subject, which is in line with
the objectives of the Nine Year Continuous Basic Education Reform 2016. The BEE curriculum lays
the foundation for understanding the diverse aspects of the modern business environment while
initiating learners towards a culture of entrepreneurship and developing an interest for business
acumen.
The BEE Curriculum comprises of four distinct and key academic subjects of the 21st Century
Learning namely Economics, Business, Enterprise and Accounting to be taught in Grades 7-9 at lower
secondary level. The aim of this textbook is to enhance teaching and learning all subjects under BEE.
The textbook also looks into terminologies, concepts, and real life situations relating to Economics,
Business, Enterprise as well as Accounting. The content knowledge in Business and Entrepreneurship
Education (BEE) will enable learners to apply and transfer the knowledge and skills acquired to other
subject areas and also build a strong foundation for those who wish to move to upper classes and /or
training as it draws into many other fields of stud .
The different units have been designed in a clear and logical style, which are interspersed with a
wide spectrum of classroom activities to develop the creative thinking skills of learners. Readers
will find simple explanations, short stories, mini conversations, short case studies, worked examples
and multiple choice questions. The end of unit activities and key terms provide a quick reference for
learners to consolidate their understanding.
Educators are advised to devise interactive lesson plans and use innovative teaching methods that
promote effective teaching and learning. They have the freedom to choose classroom activities that
allow them to progressively assess the competencies of learners.
The Authors
iv
Table of contents
Unit 1: Needs and Wants 1
1.1 Basic needs 2
1.2 Wants 4
1.3 Entrepreneurs satisfying human needs and wants 6
1.4 Basic economic problem 8
Unit 2: Goods and Services 13

2.1 Discovering goods and services 14
2.2 Types of goods 15
2.3 Classifying economic goods 17
2.4 Services 22
Unit 3: Factors of Production 27

3.1 Factors of production 28
3.1.1 Land 29
3.1.2 Labour 32
3.1.3 Capital 33
3.1.4 Enterprise 34
3.2 Rewards for factors of production 35
3.3 The production process 37

Unit 4: Business Activity 42
4.1 Business activity 43
4.2 Business activities in different economic sectors 43
4.3 Discovering the primary sector 44
4.3.1 Importance of primary sector enterprises 45
4.4 Discovering the secondary sector 47
4.4.1 Importance of secondary sector enterprises 48
4.5 Discovering the tertiary sector 50
5.5.1 Importance of tertiary sector enterprises 51
4.6 Discovering the quaternary sector 52
Unit 5: Economic Systems 54

5.1 Discovering the public sector 55
5.2 Discovering the private sector 57
5.3 Different economic systems 60
5.3.1 Free market economic 62
5.3.2 Mixed economy 62
v
Unit 6: Entrepreneurial Culture 67
6.1 Earning a livelihood 68
6.2 Discovering different occupations 70
6.3 Factors influencing choi e of occupation 72
6.4 Self-employment 73
6.5 Why people start their own enterprise? 73
6.6 Discovering entrepreneurial culture 74
6.6.1 Factors influencing e trpreneurial culture 74
6.7 Steps towards successful entrepreneurship 76
Unit 7: Enterprising spirit 79

7.1 Being enterprising 80
7.2 Enterprising spirit 81
7.3 Attitudes of entrepreneurs 81
7.4 Attributes of entrepreneurs 82
7.5 Business opportunities and challenges 83
7.5.1 Business opportunities 83
7.5.2 Business challenges 83
Unit 8: Income and Expenses 87

8.1 Funds in an enterprise 88
8.2 Sources of finan e 89
8.3 Income and expenses in an enterprise 91
8.3.1 Profit and loss 92
Unit 9: Accounts for Enterprise 95

9.1 Business transactions 96
9.2 Bookkeeping 96
9.2.1 Role of bookkeeper and accountant 97
9.2.2 Importance of bookkeeping 97
9.3 The process of recording business transactions 99
9.4 Modes of payment 100
9.5 Business documents 101
Unit 10: Cash and Bank Transactions 107

10.1 Business transactions 108
10.2 Cash and bank transactions 110
10.2.1 Cash transactions 111
10.2.2 Bank transactions 114
vi
Unit 1 I Needs and Wants
Unit 1
Needs and Wants
Learning Objectives:
On completing this unit, you will be able to:
• identify the basic needs and wants of an individual

• differentiate between needs and wants
• explain the basic economic problem
In this unit, you will learn about needs and wants, and discover how
entrepreneurs are involved in satisfying the needs and wants of individuals.
You will also discover three important concepts, namely scarcity, basic
economic problem and opportunity cost.
1
1.1 Basic needs
What do I need to survive?

What do I need to protect myself?
Basic needs are essential for survival. The three basic needs Basic needs refer to those things
are food, clothing and shelter. that are essential for survival.
Three Basic Needs
Food Clothing Shelter

Figure 1: Basic needs
Food
Human beings need food for survival, as the body requires nutrients to stay healthy. A large
variety of food is produced, for example vegetables, rice, bread, fish and meat. Food are sold at
different places such as school canteens, bakeries, vegetable markets, supermarkets, as well as
hypermarkets.
The figu e below shows different types of food. Observe the figu e and fill in the empty space
with an example of your own.
Food
Rice & bread Water
Figure 2: Examples of food

2
Clothing
Clothing is needed to protect our body. Different types of clothes are needed by individuals,
depending on the climate. For example, during winter people wear warm clothes whereas
during summer they wear light clothes.
The figu e below shows different types of clothes. Observe the figu e and fill in the empty space
Clothing
T-shirt Trousers
Figure 3: Examples of clothing
Shelter
Shelter is a place to live, which protect us from the weather. Different types of shelter like houses
or apartments are built to meet the needs of individuals.
The figu e below shows different types of shelter. Observe the figu e and fill in the empty space
Shelter
House Igloo
Figure 4: Examples of shelter
3
Activity 1
Fill in the blanks with the appropriate words given below.
clothing cannot shelter food
Basic needs refer to those things that a person ________________ live without. The three
basic needs are ________________ , ________________ and ________________ .
Activity 2
Classify the following items in terms of food, clothing and shelter.
Items Food Clothing Shelter

Water
House
Cardigan
Apartment
Fruit
1.2 Wants
I may have all the basic needs to survive but I wish to

have a latest mobile phone, a designer t-shirt and a
house with a swimming pool. I believe these will add
more comfort to my life.
Mobile phone Designer T-shirt Luxurious House

Figure 5: Examples of wants
4
After satisfying their basic needs, people desire

Goods are tangible, that is, they can be seen and
more goods and services like a luxurious touched.
house, the latest mobile phone, designer
shoes, and a bungalow with a swimming pool, Services are aids that satisfy those who consume
in order to live a more comfortable life. These them, though they cannot be touched, that is, they
are known as wants. are intangible.
Wants are those goods and services which

Wants are those goods and services people would
people would like to have but are not essential
wish to have but which are not essential for
for their survival. Satisfying our wants depends
survival.
upon our capacity to pay or our purchasing
power. If an individual does not have enough
money, only a few of these wants can be Purchasing power or capacity to pay refers to the
ability to buy goods and/or services.
purchased.
People satisfy their needs before satisfying their wants. For example, a family will spend on
food, clothing and shelter before paying for their wants.
Wants are unlimited.

For example if a person does not have a scooter, he
would wish to own one. When this want is satisfie ,
he would wish to own a car. Thus, human wants
never come to an end. They are infini e.
Key Wants vary according to individuals’ tastes and

preferences.
characteristics For example, during summer more ice cream is
of wants desired.
Wants grow over time.

For example, technology creates new wants
such as mobile phones with more advanced
applications like camera, google maps and access
to the internet.
Figure 6: Key characteristics of wants
5
Activity 3

taste essential unlimited preference pay time
Wants refer to goods and services that are not ______________ for survival. To satisfy
our wants, we need to have the capacity to ______________ for them. Wants are
______________ and vary according to ______________ and ______________ .
Activity 4
(a) Explain the difference between needs and wants.

__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
(b) Classify the following items into needs or wants.
Items Needs Wants

(a) Water
(b) Electric bicycle
(c) Jeans
(d) Luxurious house
(e) iPad
1.3 Entrepreneurs satisfying human needs and wants

Goods and services are produced by entreprises to satisfy
human needs and wants. An enterprise is a business which An enterprise is a business which takes
takes risks to produce commodities (goods and services) risks to produce commodities so as to
with a view to satisfy needs and wants and make profit . satisfy needs and wants and make profit.
An entrepreneur is someone who organises and manages

a business with the aim of making profi . Entrepreneurs are Entrepreneur refers to someone who
usually ambitious to expand their business in the future. organises and manages a business, with
They are enterprising as they develop new ideas and develop the aim of making profit.
necessary skills and knowledge to start their enterprise. In
other words, entrepreneurs are motivated and willing to
undertake business projects which involve some risks. Risk-taking means that entrepreneurs
venture into a new business even if
In Mauritius as well as in Rodrigues, we have some famous there is a risk of making losses.
entrepreneurs in the fields of communication, food,
jewellery, textile and commerce.
6
Goods & Services
Entrepreneurs Consumers
Payment
Figure 7: Entrepreneurs satisfying human needs and wants
Activity 5
Read the case studies below and carry out the activity that follows.
Case Study A
Entrepreneur in Mauritius
D. Sarjua can be called the Mauritian ‘Serial Entrepreneur’. He started his career at the age
of 24 as a vegetable seller. His enterprise is specialised in a number of agro-related projects,
namely the production of pickles, jams, spices, herbal
tea with bettlenut leaves known as ‘betel’ and tuna with
pink pepper. He was the fi st Mauritian to export chillies
(‘ti piment vert’) to Réunion Island. Sarjua products are
popular in many supermarkets in France and in other
parts of Europe. He continued to develop his enterprise
and added cassava (‘manioc’) and breadfruit fl ur to his
exhaustive line of products.
(Source: www.lemauricien.com)
7
Case Study B
Entrepreneur in Rodrigues
Miel Victoria has been set up by Marie-Claude Donze in Rodrigues Island in 2005. Miel Victoria
proposes honey, but also derivatives such as sweets. The enterprise also produces cream for the
body and the hair (the famous Bee Coco Cream) from beeswax and coconut oil. Miel Victoria
offers products (spray for the throat and balm for healing)
from propolis.
The enterprise has always involved the local community,

towards economic and social progress. It holds the belief
that the development of Rodrigues must be done with the
population so as to transmit the vitality, hospitality and
creativity of the Rodriguan people.
(Source: miel-victoria.e-monsite.com)
(a) Mr Sarjua started his career as a _______________________ . (fruit seller / vegetable seller)
(b) List the projects in which Mr Sarjua’s enterprise is specialised.
______________________________________________________________________________
______________________________________________________________________________
(c) Marie-Claude Donze specialises in the production of _________________ . (honey / limon)
(d) List the products proposed by Miel Victoria.

______________________________________________________________________________
______________________________________________________________________________
1.4 Basic economic problem
Do you think you can satisfy all your wants?
Are your wants limited?
Is the money available suffici t to buy all your needs and wants?
Even if you had more money, could you be able to satisfy ALL of your wants?
8
The basic economic problem is that human wants are unlimited or infini e but the resources available
to satisfy them are limited or scarce.
Resources are also said to have alternative uses. This means that resources available can be used for
several purposes. For instance, water can be used for washing, drinking, irrigation or cleaning. Money
can be used to buy food, mobile phones, clothes or cinema tickets. A plot of land can be used to build
a school, a house or to cultivate crop.
Scarcity refers to the basic economic
Resources are always scarce to satisfy unlimited human wants. problem where wants are unlimited but
There is a permanent state of imbalance between unlimited resources available to satisfy them are
wants and limited resources. This basic economic problem is also limited.
called scarcity.
Since resources are scarce, people cannot satisfy

Limited
all their wants. Hence they have to make choices
Resources and sacrifi es. For example, Sarah has Rs100. She
wants to buy a phone card and a burger, each
Unlimite
d costing Rs100. She chooses to buy the phone
Wants
card. Therefore she sacrifi es the burger. The
opportunity cost of buying the phone card is the
burger.
Figure 8: Limited resources versus unlimited wants
Opportunity cost is the sacrifice which

arises while making a choice.
Sarah’s scarce
resources (Rs 100)
Options
Phone card Burger
Opportunity Cost
Choice
Figure 9: Sarah’s options
9
Activity 6
Complete the table below.
Items Choice Opportunity cost
Gym or School School
Hospital or Swimming Pool Swimming pool
T-shirt or iPad iPad
Bread or Rice Bread
Fruits or Fries Fries
Activity 7
State whether the following statements are True or False.
1. Natacha lacks money to buy herself a new pencil

case. This is known as scarcity.
2. People can survive without their needs.
3. An enterprise produces aluminium openings

rather than clothes. This decision involves an
opportunity cost.
4. Your friends can buy everything they want

without any sacrifi e.
10
End of Unit Activity
1. Match each term in Column A with the corresponding definition in olumn B.

Write your answers in the table which follows.
Column A Column B
A Needs 1 Things that are essential for survival.
The basic economic problem where wants are unlimited but

B Wants 2
resources available to satisfy them are limited.
A benefit th t a person could have received but sacrifi es to

C Entrepreneur 3
choose something else.
D Scarcity 4 Things that are not essential for survival.
E Opportunity Cost 5 Someone who organises and manages a business.
Column A A B C D E
Column B
2. State whether the following statements are True or False.
1. Wants are unlimited.
2. One cannot survive without needs.
3. People work to satisfy both their needs and wants.
4. Food and shelter form part of our basic needs.
5. Education is a basic need.
6. People who cannot satisfy their wants are not happy.
7. One can only satisfy needs when income is limited.
8. Businesses or enterprises produce wants rather than needs.
11
Group Presentation
• Step 1: Arrange the students into pairs or groups.

• Step 2: Ask the students to design about 5-10 cards on their needs and wants.
They may cut and paste pictures on the cards.
• Step 3: Exchange the cards with another group. ( e.g. Group 1 or Pair 1 exchange
their cards with Group 2 or Pair 2).
• Step 4: The two groups join together and they classify the cards in terms of needs
and wants. They discuss on the following:
(i) In which category do you have more cards? (needs or wants) Why?
(ii) If they have to move two cards from the needs pile to the wants pile,
what would be the two needs? Give one reason.
• Step 5: Take all the cards and place them on the wall. The students can have a
complete list of different needs and wants.
KEY TERMS
Basic needs refer to those things that are essential for survival.
Enterprise is a business which takes risks to produce commodities so as to satisfy needs

and wants and make profit .
Entrepreneur refers to someone who organises and manages a business, with the aim of
making profi .
Goods are tangible, that is, they can be seen and touched.
Opportunity cost is the sacrifi e which arises while making a choice.
Purchasing power or capacity to pay refers to the ability to buy goods and services.
Risk-taking means that entrepreneurs venture into a new business even if there is a risk of
making losses.
Scarcity refers to the basic economic problem where wants are unlimited but resources available
to satisfy them are limited.
Services are aids that satisfy those who consume them, though they cannot be touched,
that is, they are intangible.
Wants are those goods and services people would wish to have but which are not
essential for survival.
12
Unit 2 I Goods and Services
Unit 2
Goods and Services

• differentiate between a good and a service
• describe the different types of goods and services
• explain the role of the government as a producer of public goods
In this unit, you will learn about the different types of goods and services
that are provided by entrepreneurs and the government to satisfy needs
and wants.
13
2.1 Discovering goods and services
The following is a conversation between Rania and

her teacher about goods and services.
Rania: Sir! Yesterday, my mother and I went to a shopping

mall.
Teacher: What did you notice there?
Rania: We went to the supermarket which is found in the
shopping mall. Many consumers were carrying trolleys A consumer is someone who buys
full of goods. goods and services to satisfy needs
and wants.
Teacher: What types of goods did you see?
Rania: Consumers were buying food items.
Teacher: Many people buy food because it is a need which is important for survival.
Rania: Yes, you are right. I have also seen people buying clothes, which is another
example of a need.
Teacher: Consumers also buy goods like perfumes, and washing powder, to mention a
few.
Rania: My mother and I went to the counter to pay for the
goods. She is very environment-conscious and does not use
plastic bags to carry goods. I also accompanied my mother
to the clinic where she paid for the services of a doctor.
Teacher: You have observed that people pay for services to
satisfy their needs and wants.
Activity 1
(a) Identify the goods and services mentioned in the above conversation.
___________________________________________________________________________
___________________________________________________________________________
(b) List two goods and two services that you require to satisfy your needs and wants.
Goods: (1)_________________________ (2) _______________________
Services: (1) _________________________ (2) ________________________
14
2.2 Types of goods
1. Free Goods
Free goods are provided by nature. Individuals use them without making any form of payment
and they are unlimited in supply. For example, sunlight is available to every human being.
Enterprises do not pay for sunlight when they use solar energy to produce electricity. At the
seaside, the beach is freely available to everyone.
Free goods are provided by nature.
A free good can also be described as a good that Individuals use them without making
can be consumed by everyone at the same time. any form of payment.
For example sunlight, sea water and pure air.
Free Goods Rs 0
t
ligh re air
Sun Sea Pu
Figure 1: Examples of free goods
2. Economic goods
In contrast to free goods, economic goods are scarce. People have to pay for them and they
are not abundant in supply. Enterprises use scarce resources to produce different types of
economic goods, which they sell for profi . Economic goods are goods that are obtained in
exchange of a payment.
The consumption of an economic good involves an

Economic goods are produced using
opportunity cost. For example, as a student you have a
scarce resources. People have to pay
limited amount of pocket money and therefore cannot
afford to buy all the economic goods that you want. for them and they are not abundant
Therefore, you make choices and the decision to buy one in supply.
economic good means sacrificing another on .
Economic Goods
ry
s elle
Fan Pen Jew
Figure 2: Examples of economic goods
15
Activity 2

(a) Free goods are naturally obtained.
(b) Economic goods are abundant in supply and have no

opportunity cost.
(c) Economic goods are free of cost.
(d) Sunlight is a free good.
(e) Enterprises use resources to produce economic goods.
(f ) Fire services and police services are free goods because

they are provided to all citizens.
Activity 3
State three differences between free goods and economic goods.
Free Goods Economic Goods

(a)
(b)
(c)
16
2.3 Classifying economic goods
Economic goods can be classified into private goods and public goods. Most of the goods are
produced by entrepreneurs, except public goods, which are provided by the government.
ECONOMIC GOODS
Private Goods Public Goods
Produced by Produced by the

entrepreneurs government
Figure 3: Economic goods
TYPES OF ECONOMIC GOODS
Durable goods Non-durable Private Goods

goods
E.g. a laptop E.g. a motocylce
E.g. biscuits
Public Goods Producer Goods Consumer Goods

E.g. street lighting E.g. a tractor E.g. a sandwich
Figure 4: Types of economic goods
17
A. Private goods
Private goods are goods that
consumers buy for their personal
Private goods are goods that consumers buy for their
use. Consumption of a private good
personal use. Consumers own private goods because they pay
by one individual prevents another
for them. For example, if Jane buys a pen then she is the owner
individual from consuming it.
of the pen.
A private good is a good that must be bought to be consumed

0
and its consumption by one individual prevents another RsR5s00
individual from consuming it. These are produced by privately
owned enterprises.
Student using stationery A private car Person eating food

Figure 5: Examples of private goods
B. Public goods
A public good is a good or service that
Public goods are goods or services that are provided only is provided only by the government.
by the government to everyone. For example, street lighting
and police services.
The Government is the authority of a
The government provides public goods in order to improve country having the power to decide
the welfare of the citizens. on behalf of people in a society.
Many of these goods and services are finan ed by taxpayers’

money. Tax is a compulsory contribution
to the government by individuals,
workers and businesses.
Police services Street lighting and roads
Figure 6: Examples of public goods
18
Activity 4
Fill in the table with two features of private and public goods.
Private Goods Public Goods
(i) ____________________________ (i) _____________________________
(ii) ____________________________ (ii) _____________________________
C. Consumer goods
Consumer goods are goods which satisfy human needs and

wants through their consumption or use. Consumer goods are goods which satisfy
human needs and wants through their
There are two types of consumer goods, namely durable and consumption or use.
non-durable goods. Some of these consumer goods may last
for a long time, for example a bicycle and a car, whereas other
consumer goods are perishable, for example bread.
Bread Television
Figure 7: Examples of consumer goods
D. Durable goods
Durable goods are goods, which last for a long period of time.
Durable goods are goods which last
They can be used over and over again. For example, an individual
for a long period of time.
may use a car for a number of years. Office furniture is another
example of durable goods.
19
Mobile phone Laptop Car
Figure 8 : Examples of durable goods
E. Non-durable goods
Non-durable goods are goods that are consumed over a Non-durable goods are goods that are
short time period as they have a limited lifespan. Examples of consumed over a short time period as
non-durable goods are cakes, fresh vegetables, sandwiches they have a limited lifespan.
and fresh fl wers.
Bouquet of fresh fl wers Fresh broccoli Sandwich
Figure 9 : Examples of non-durable goods
Activity 5
Fill in the table with two features of durable and non-durable goods.
Durable goods Non-durable goods
(i) __________________________________ (i) _____________________________
(ii) __________________________________ (ii) _____________________________
20
Activity 6
Classify the goods as durable and non-durable goods.
Types of goods Durable goods Non-durable goods
(a) Smartphone
(b) Bread
(c) Bottled water
(d) Bicycle
(e) Fresh vegetables
(f ) Fishing rod
(g) Bouquet of fl wers
F. Producer goods
Producer goods are man-made goods used to produce Producer goods are man-made goods
other goods and services. For example tools, equipment and used to produce other goods and services.
machinery are used to facilitate the production of economic
goods.
Tractor Oven Printing machine
Figure 10 : Examples of producer goods
21
Activity 7
Match each of the following term with its corresponding picture.
Producer Good Economic Activity
Computer
Textile Manufacturing
Machine
Deep sea fishin
Boat
Call centre
Greenhouse
Greenhouse farming
2.4 Services
Services are aids that satisfy those who consume them, Service is an aid that satisfies the
though they cannot be touched. For example, a dentist one who consumes it though it
provides treatment to patients. Services are activities
cannot be touched.
carried out by individuals for the benefit of other .
The following are some examples of services:
Health services Fire services Hotel services
Air travel services Hair dressing services Mail delivery services
Figure 11: Examples of services

22
Activity 8
Read the case study below and carry out the activity that follows.
On a Saturday morning, Rihan decided to accompany his mother to the dentist. They
decided to go by bus and on their way to the city centre, they saw people buying fresh
vegetables in a small village market.
The low fl or air conditioned bus stopped at the city centre and all the passengers were able
to get down. It was quite warm and mother bought a bottle of cold water for herself and
mango juice for Rihan. Afterwards, they both made their way to the dentist.
While mother was waiting for her turn, Rihan went to a nearby shop and bought a flash
disk. Then, he stopped at ‘Cool electronics’ to buy a few bulbs. Rihan used the free wifi
service to phone his father and requested him to join them for lunch.
(a) Identify the goods and services used by Rihan and his mother.
Goods Services
(b) Differentiate between a good and a service.

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
(a) A free good is obtained freely without making any sacrifi e.

(b) A car is a public good.
(c) Entrepreneurs use scarce resources to produce free goods.
(d) Durable goods are perishable and cannot be used for a long time.
(e) The government provide only private goods.
(f ) The government can prevent non-taxpayers from consuming public goods.
(g) Private goods are scarce in supply.
(h) Entrepreneurs produce goods and services only for their own use.
(i) Producer goods are useful in producing other goods and services.
(j) Services are tangible items which can be touched.
23
2. Choose the correct answer for each of the questions below and write it in the space
provided.
(1) Which of the following is not a public good?

A. Street lighting
B. Police services
C. Fee paying school
D. Defence Answer: _______
(2) Which of the following is a service?

A. Maritime transport
B. A textbook
C. Bottled water
D. An aircraft Answer: _______
(3) Who is an entrepreneur?

A. A clerk in an office
B. A labour inspector
C. An ice cream manufacturer
D. A nurse Answer: _______
(4) Which statement about producer goods is correct?

A. They are provided freely by nature.
B. They are used for a very short period of time.
C. They are man-made goods used to produce other goods and services.
D. They do not deplete resources.
Answer: _______
3. Imagine yourself as an entrepreneur. Suggest a good or service that you would like to
produce and give three reasons for your answer.
Good or Service:
Reason 1:
_____________________________________________________________________________
_____________________________________________________________________________
Reason 2:
_____________________________________________________________________________
_____________________________________________________________________________
Reason 3:
_____________________________________________________________________________
_____________________________________________________________________________
24
4. Read each scenario and state whether you are purchasing a good or a service.
Write the word good or service on each line.
(a) You buy a pen from a shop. ________________

(b) You get a haircut. ________________
(c) You pay a visit to a doctor. ________________
(d) You purchase a book to give as a birthday gift. ________________
(e) Your brother buys a new shirt. ________________
(f ) You hire a painter to paint your house. ________________
(g) Your teacher sells his car for Rs 200,000. ________________
(h) Your friend pays a visit to the dentist. ________________
(i) Give an example of someone purchasing a service. [Do not use an example from the above.]
_____________________________________________________________________________
(j) Give an example of someone purchasing a good. [Do not use an example from the above.]
_____________________________________________________________________________
5. Match each term in Column A with the corresponding definition in Column B. Write
your answers in the table which follows.
Column A Column B
A Free goods 1 Facilitate the production of other goods and services.
B Economic goods 2 Goods which are made to last for a long period of time.
C Durable goods 3 Goods which are provided by nature.
An aid that satisfies the one who consumes it though it

D Producer goods 4
cannot be touched.
Goods which are produced using scarce resources.

E Service 5 People have to pay for them and they are not abundant in
supply.
Column A A B C D E
Column B
25
KEY TERMS
A consumer is someone who buys goods and services to satisfy his/her needs and
wants.
Consumer goods are goods which satisfy human needs and wants through their
direct consumption or use.
Durable goods are goods which last for a long period of time.
Economic goods are produced using scarce resources. People have to pay for them
and they are not abundant in supply.
Free goods are provided by nature. Individuals use them without making any form
of payment.
Goods are tangible items, that is, they can be seen and touched.
Government is the authority of a country having the power to decide on behalf of

people in a society.
Non-durable goods are goods that are consumed over a short time period as they
have a limited lifespan.
Private goods are goods that consumers buy for their personal use. Consumption of
a private good by one individual prevents another individual from consuming it.
Producer goods are man-made goods used to produce other goods and services.
Public good is a good or service that is provided only by the government.
Service is an aid that satisfies the one who consumes it though it cannot be touched.
Tax is a compulsory contribution to the government by individuals, workers and

businesses.
26
Unit 3 I Factors of Production
Capital Land
Enterprise Labour
Factors of production
Unit 3
Factors of Production
• describe the four factors of production
• differentiate between renewable and non-renewable resources
• identify the reward for each factor of production
• explain the use of factors of production in the production process
In this unit, you will learn about the different factors of production, namely
land, labour, capital and enterprise, as well as their uses in the production
process to obtain goods and services. You will also learn the difference
between renewable and non-renewable resources.
27
3.1 Factors of production
Factors of production are resources used to produce

Factors of production are resources
goods and services. They are also called factor inputs.
used to produce goods and services.
There are four factors of production namely: land, labour,
capital and enterprise.
Resources = Factor inputs
The following diagram shows factors of production used in
an enterprise to obtain output. Output refers to the goods and
services produced.
Factors of production
Land Labour Capital Enterprise
Figure 1: Factors of production
28
Activity 1
“Zassar Unik” Pickle Enterprise
Mrs Claire is a famous entrepreneur in Port Sud-Est, Rodrigues. Five

years ago, she invested Rs 5,000 to set up “Zassar Unik”, her pickle-making
enterprise. The pickles are sold to local people and tourists.
To prepare the pickles, Mrs Claire uses ingredients like lemons, chillies,
honey, salt, and oil, among others. Items like utensils, knives, water,
electricity, gloves, mixer/grinder are also used in the production. Mrs
Claire employs Emilie to assist her in the enterprise. She also helps her to
cultivate lemons, chillies and garlic on a plot of land in front of her house.
Identify the resources that Mrs Claire uses in her enterprise.

_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
3.1.1 Land
Land refers to the natural resources or free gifts of nature used in the production of goods
and services.
For example, a restaurant or a school uses natural resources like a plot of land for the construction
of buildings. A jeweller uses gold and precious stones to make jewellery.
Land refers to the natural resources

or free gifts of nature used in the
production of goods and services.
Water Sunlight
Tree Soil or a plot of land
Figure 2: Examples of land
29
Activity 2
Identify and tick the natural resources from the list below.
Factory building Soil for crop cultivation Rainwater
Rivers Workers Coal
Wind Oceans Entrepreneurs
Anthurium fl wers Sand Sugar cane
Tea crops Computer Forests

Mountains Tropical fruits and fl wers Sunshine
Renewable and non-renewable resources
Read the conversation below.
Mr Ramen and his daughter, Jenna, stopped at a filling station on their way to school. She
started thinking about the large difference between the price of petrol and the price of
water.
Jenna: Dad, what is more precious, water or petrol?
Dad: Jenna, obviously water is essential for life. We would all die without it.
Jenna: Then why is petrol so expensive while water is much cheaper? Should water not
be more expensive than anything else if it is essential for life?
Dad: Water is a renewable resource. When it rains, the reservoirs are filled up again. In
this way, water is replaced by rainfall but oil reserves are not easily replaced
by nature. Therefore, it is said that petrol is a non-renewable resource.
Jenna: Oh, now I understand! Non-renewable resources are
not easily replaced by nature, this is why they are more expensive.
30
Land or natural resources can be classified i to renewable and non-renewable resources.
Natural Resources
Renewable resources are resources Non-renewable resources are resources

which are replaced by nature. which are not easily replaced by nature.
Oil
Rain Coal
Gas
Sun Gold
Natural fl wers Diamonds
Figure 3: Examples of renewable and non-renewable resources
Renewable resources are resources which are replaced by nature.
Non-renewable resources are resources which are not easily replaced by nature. Some
resources are limited in supply. Once they are used, the quantity available is reduced. Therefore,
non-renewable resources must be used cautiously.
Activity 3
Classify the following resources as renewable or non-renewable resources in the

table below.
precious stones rainwater oxygen petrol forest

sunlight copper coal gas minerals
Renewable resources Non-renewable resources
31
3.1.2 Labour
All enterprises need people in the production of goods and Labour refers to workers who provide
services. Labour refers to workers who provide physical their physical and mental efforts to
and mental efforts to produce goods and services. Another produce goods and services.
term for labour is human resource. Without human efforts,
production cannot take place.
Farmers Housekeeper Factory workers Teachers
Figure 4: Examples of factor of production labour
Activity 4
(a) Identify three examples of the factor of production labour in your school.
, and .
(b) Referring to the case study “Zassar Unik”, identify an example of labour used
by the entrepreneur, Mrs Claire.
(c) State whether the following statements are True or False.
(i) Production process cannot take place without human efforts.

(ii) Labour refers to a worker providing only physical efforts in the
production of output.
(iii) A caretaker in your school is an example of labour.
(iv) Another term for labour is human resources.
32
3.1.3 Capital
Capital refers to man-made resources
Capital refers to man-made resources used in the used in the production of goods and
production of goods and services. Capital is an important services.
resource used by enterprises to produce final g ods.
For example, in the production of shoes machines, A final good is a good which is
equipment, factory building as well as computers are ready for consumption.
used.
Financial capital is money used

Financial to buy tools and equipment in
Capital Capital the business.
in an
enterprise
Non- Non-financial capital are other
Financial man-made resources required
Capital to produce output.
Figure 5: Financial and non-financial capita
Activity 5
1. Capital is a natural resource.
2. A final good is a good which is eady for consumption.
3. A tractor is an example of financial capita .
4. Non-financial capital a e man-made resources that assist

in the production process.
33
3.1.4 Enterprise
Enterprise as a factor of production
combines the other three factors
The fourth factor of production is enterprise. Enterprise (land, labour and capital) to
as a factor of production combines the other three produce goods and services with
factors (land, labour and capital) to produce goods the aim of making profits.
and services with the aim of making profit . The
entrepreneur (decision-maker) is responsible for Profit occur when revenues are
organising resources and takes all the important greater than costs. It is calculated
decisions in the business, such as what to produce, as follows:
whom to employ and where to locate the business.
Profit = Revenue – Cost
As a risk-taker, the entrepreneur can make profit if the
business is successful or losses if the entrepreneur does Loss occur when costs are higher
not manage the business properly. than revenue.
Owner of a farm Owner of a

fashion boutique
A shopkeeper A film p oducer
Figure 6: Examples of entrepreneurs
34
Activity 6
Choose the correct answer and write it in the space provided.

1. An entrepreneur is someone who is
A a risk-taker only.
B a decision-maker only.
C both a risk-taker and a decision-maker.
D a natural resource. Answer: _______
2. Sabrina took a risk and invested her savings to set up a new business of cooking
home-made snacks and supplying them to supermarkets. An example of risk taken
by Sabrina is
A making profit .
B making losses.
C she is the only decision-maker.
D she is not helped by her friends in her enterprise. Answer: _______
3. An example of an entreprise is
A a self-employed taxi driver.
B a supermarket worker.
C a gym secretary.
D an office worker. Answer: _______
3.2 Rewards for factors of production
Each factor of production earns a

reward for its contribution in the Factor of Production Factor rewards
production of goods and services. For
Land Rent
example, the reward for land is rent.
Labour earns wages for the efforts Labour Wages
provided by workers.
Capital Interest
Capital earns interest for the use of Profi
Enterprise
man-made resources. Enterprise earns
profits for taking risks and assuming Figure 7: Factor rewards
responsibilities of the business.
35
Activity 7
Read the case study and fill in the table elow.
Mr Sham is a self-employed vegetable grower in Henrietta. Two years ago, he

borrowed Rs 150,000 from the bank (loan) to set up his small agricultural business.
The entrepreneur started by renting a plot of land from his friend to grow crops. He now
employs 2 workers to assist him in the fi lds.
The money received (revenue) from the sales of his vegetables is used to pay the following
monthly expenses:
(i) rent to the landowner,
(ii) wages to his workers, and
(iii) interest on his loan.
The money left fter all these expenses become his profit.
Rs Rs
Revenue from sales 50,000
Less expenses:
Rent 5,000
Wages 10,000
Interest 2,000
Other expenses 15,000 (32,000)
PROFIT 18,000
(a)
Factors of production Example in the case
Rewards to factors of production
used by Mr Sham study
Land The fiel Rent
(b) Is the enterprise successful ? Give one reason.
__________________________________________________________________
36
Activity 8
Match each term in Column A with the corresponding definition in Column B. Write
your answers in the table which follows.
Column A Column B
Factors of production Definitio
A Labour 1 Man-made resources used to produce finished good .
Free gifts of nature used in the production of

B Enterprise 2
goods and services.
Physical and mental efforts of workers who

C Land 3
produce output.
Organising resources to produce goods and services

D Capital 4
while taking risk with an aim to make profi .
Column A A B C D E
Column B
3.3 The production process
The production process refers to the steps involved in The production process refers to
converting factor inputs into output. It is a complex process steps involved in transforming factor
where entrepreneurs organise resources for production to inputs into output.
take place.
INPUTS PRODUCTION PROCESS OUTPUT
Resources Goods
or &
Factors of Production Services
Figure 8: The production process
37
The figu e below shows the production process in “Zassar Unik Enterprise”.
1 2 3 4
Cultivation Purchase of Preparation Packaging
of lemon raw materials of pickles
Figure 9: Example of the production process in ‘Zassar Unik’ enterprise
Another example of a production process can be in a textile factory producing dresses.
Designing Cutting Stitching Ironing Packaging
Add pic
Figure 10: Example of the production process in a textile factory

Activity 9
Fill in the blank spaces below. The first one has een done for you.
PRODUCTION
INPUTS PROCESS OUTPUT
Resources or
Goods & Services
GOOD Mobile phone production

Metal
Glass
Tools
Machinery
Workers
Factory building
GOOD Furniture production

Carpenter
Workshop
Wood
Tools & equipment
Water
Electricity
Workers
Paint
38
SERVICE Provision of education in a school
CERTIFICATE
SERVICE Provision of postal service
1. Jim and Tom are two young entrepreneurs. They are business partners and owners of Sea
Sports Club, an enterprise which provides parasailing and
kayaking services. The business is expanding and they are
planning to buy more parasails and motorboats to satisfy
an increasing number of customers. Consequently, they
also need to employ more staff to work on the beach and a
secretary for administrative work.
Identify which factors of production have increased for Sea Sports Club enterprise.
2. Mr Lazio runs a canteen in a secondary school in Mauritius. He invests Rs 100,000 to buy

furniture, fitting , and shelves to arrange for water and electricity supply, as well as to buy the
snacks he will sell to the students. He employs his niece, Sabine, to help him in the canteen.
Identify examples of the four factors of production in Mr Lazio’s business.
Factor of Production Example(s)
Land
Labour
Capital
Enterprise
39
3. Fill in the blanks with the appropriate words.
Renewable resources are

. An example is .
On the other hand, non-renewable resources refer to . An
example of non-renewable resources is .
4. Project work
Create a poster to demonstrate the factors of production used by an enterprise of your own
choice. You may present your poster in the format given below.
What the Picture

enterprise of the enterprise
is about
used in the enterprise

Your name & class
40
KEY TERMS
Capital refers to man-made resources used in the production of goods and services.
Enterprise as a factor of production combines the other three factors (land, labour
and capital) to produce goods and services with the aim of making profit .
Factors of production are resources, also called factor inputs, used to produce goods
and services.
Financial capital is money used to buy tools and equipment in the business.
Final/finished g od is a good which is ready for consumption.
Labour refers to workers who provide their physical and mental efforts to produce
goods and services.
Land refers to the natural resources or free gifts of nature used in the production of
goods and services.
Loss occur when costs are higher than revenue.
Non-financial apital are other man-made resources required to produce output.
Non-renewable resources are resources which are not easily replaced by nature after
their use.
Output refers to the goods and services produced.
Production process refers to the steps involved in transforming factor inputs into output.
Profi occur when revenues are greater than costs.
Renewable resources are resources which can be replaced by nature.
41
Unit 4 I Business Activities
TERTIARY SECTOR
SECONDARY SECTOR
PRIMARY SECTOR
Unit 4
Business Activity
• define business a tivity
• understand the different economic sectors
• discover the importance of each sector

In this unit, you will discover the different sectors of an economy.
Examples will be provided to illustrate the types of activities that take
place within the different sectors. You will also learn about the importance
of each sector.
42
4.1 Business activity
Businesses combine the factors of production

Business activity refers to the
to produce goods and services. Enterprises
production and distribution of goods
can be small, big, privately-owned or
and services to satisfy the needs and
government owned. Business activities
wants of customers.
can range from production to distribution of
goods and services.
Organise factors of
production
Exchange and
distribute goods
Business Produce goods and
services to satisfy
and services Activities needs and wants
Figure 1: Business activities
4.2 Business activities in different economic sectors
Enterprises can be grouped into different economic sectors according to their business
activities. These economic sectors include the primary sector (basic production), secondary
sector (manufacturing sector), tertiary sector (service sector) and quaternary sector (knowledge-
based activities).
Economic sector is a type of
Quaternary Sector business activity in a country.
(E.g. consultancy, research and development)
Tertiary Sector
(E.g. trade, transport, education and health)
Secondary Sector
(E.g. manufacturing of textile products and construction)
Primary Sector
(E.g. agriculture, forestry, mining and fishing
Figure 2: Different economic sectors
43
Activity 1

goods needs services buy raw materials
service wages resources finish d goods wants
(a) A business is an organisation that uses to satisfy human
and .
(b) Businesses produce and by

converting __________ ____________ into ____________ ______________.
(c) Employees are paid in terms of and they use it to

goods and services.
(d) The tertiary sector is also known as the sector.
4.3 Discovering the primary sector

The primary sector is concerned with
The main activity of some enterprises is to extract and the extraction of natural resources.
use resources from nature. These resources are not It includes fishing, farming and
man-made but are gifts of nature. mining.
Examples of primary sector activities are vegetable

Natural resources are gifts from
and fl wer cultivation, animal rearing, mining, fishing
nature and are not made by human
as well as oil drilling. beings.
Farming Forestry
Mining Fishing
Figure 3: Activities of enterprises in the primary sector
44
Activity 2
Classify the following items into natural or man-made resources
air, mobile phone, hat, water, forests, table, timber, natural gas, lakes, scissors
Man-made
Natural resources resources
Activity 3
Ryan and his friend Sylvio are the oldest fishermen in

Albion. They own a boat named “Boat of Happiness”.
They earn their living by fishing.
(a) Identify the sector in which Ryan and Sylvio work.
(b) Describe the sector which you have identified in pa t (a).
4.3.1 Importance of primary sector enterprises
Many primary sector enterprises are set up on a small scale and they grow over time. The chart
that follows illustrates the importance of primary sector enterprises.
45
Raw materials are

provided to produce
other goods
Revenue can be
earned by exporting
Importance of Idle natural resources can
raw materials like primary sector be used to produce more
fl wers and local fruits goods and services
enterprises
Create jobs like

fishe men and
farmers
Figure 4: Importance of primary sector enterprises
Activity 4
Vanessa has always been passionate about agriculture. After

completing her studies, her grandfather gave her a plot of land. She
decided to explore her talents and skills to grow litchis. Vanessa now
employs workers to assist her in the enterprise. She also uses her
innovative skills to make use of the unused land to produce organic
vegetables. Her enterprise is making profits and is expanding.
Vanessa is also able to export the litchis.
1. Vanessa used her passion and skills to set up an enterprise in

the primary sector.
2. Primary sector enterprises do not lead to the creation of jobs.
3. Litchi is an example of a natural resource.
4. Vanessa’s enterprise is making profits and she is able o export litchis.
46
Activity 5
Read the case study below and fill in the table th t follows.
Success story of Mehdi
After completing his BSc in Agricultural Management from

the University of Mauritius in 2000, Mehdi decided to study
further and went abroad for a Masters Degree. When he
came back to Mauritius, getting a job in the agricultural
sector was a challenge. It was then that Mehdi thought
of going into entrepreneurship and do something he had
particularly been interested in Hydroponics.
Following this curiosity, he did some research on the subject on the internet to gather
information. Hydroponics is one method in which crops are grown in a medium other than
soil (e.g coco peat) under a protected culture like a greenhouse.
All he needed was land and fi ance. With the help of his parents, he has been able to get
a loan of Rs 1.2 million from the bank by putting a piece of land under guarantee and
paying a monthly instalment of Rs 15,000. Together with a friend, Mehdi succeeded in
constructing two locally mounted greenhouses of 1000 m2 at Triolet (a village in the north
of the country) and they formed a company called “Les Serres du Nord”.
Source: Adapted (http://nawsheen.com/young-mauritian-entrepreneur-engaged-in-

hydroponics-and-online-marketing/)
Name of entrepreneur
Name of enterprise
Sector in which the business operates
Identify the good
Describe the business activities
4.4 Discovering the secondary sector

Secondary sector enterprises are
Secondary sector enterprises are involved in the processing of involved in the processing of raw
raw materials into goods. Manufacturers produce goods such as materials into goods.
clothing, furniture, vehicles, houses and machinery.
Furniture production Car manufacturing Construction Textile production
Figure 5: Activities of enterprises in the secondary sector
47
Activity 6
Deven is renowned for his bakery around the island. One day, Vani and her classmates visited
Deven’s bakery. They were fascinated with the making of bread. Vani and her friends drew
the following charts to explain the process of bread-making.
Use of wheat in
Wheat cultivation Wheat as raw material bread-making
(a) Identify the sector in which Deven is engaged.


4.4.1 Importance of secondary sector enterprises
Secondary sector enterprises are involved in manufacturing and construction activities. The
chart below illustrates the importance of the secondary sector.
Raw materials are

transformed into
finished good
Revenue can be
earned by exporting
Importance of Larger variety
finished goods like secondary sector of goods for
consumption
textile products and
canned foods enterprises
Create jobs like

machinists and
builders
Figure 6: Importance of secondary sector enterprise

48
Activity 7

jobs exporting construction goods manufacturing
Secondary sector enterprises are involved in _____________and_____________

activities. A large variety of are produced. There is also the
creation of . In the secondary sector revenue can be earned by
goods.
Activity 8
Success story of Arielle
Arielle Rene-Fatim - a wild passion for ‘Le Fer Forgé’

Arielle Rene-Fatim completed her academic education and began
to learn the job of welding with her father, who was already in the
business and the owner of a small metal workshop.
Arielle has taken over the business and specialised in the
manufacture and design of ‘Fer Forgé’ products.
Arielle Rene-Fatim is a real ‘Dame de Fer’.
She is today the soul of her enterprise: ‘La Passion du Fer Forgé’. Arielle’s business has
continued to grow. She runs two showrooms at Saint Pierre and Rose Hill where she displays
her own designs.
(Source: Le Mauricien. Com mardi, 20 juin, 2017 - 20:28)
Name of enterprise
Identify the good
49
4.5 Discovering the tertiary sector
The tertiary sector provides services to consumers and

enterprises. It is also known as the service sector. Tertiary The tertiary sector provides services
to consumers and enterprises.
sector enterprises are involved in activities such as banking
services, education and training, hairdressing, transport
services and legal services.
Banking services Educational services Hairdressing services
Figure 7: Activities of enterprises in the tertiary sector
Activity 9
Leticia - The entist who gives you back your smile.
Leticia is a young dentist and she offers her services at the hospital during
weekdays. On Saturday, she operates in a private clinic in her locality.
Leticia has decided to open a dental clinic in Rodrigues Island where she
would train other dentists to offer a good service to the people.
(a) Identify the sector in which Leticia works.


50
4.5.1 Importance of tertiary sector enterprises
People require a number of services in their daily life. The chart below illustrates the importance
of tertiary sector enterprises.
Create jobs like

lawyer and teacher
Revenue can be Importance of Provide

earned from the
service sector like
tertiary sector services to
other sectors
tourism enterprises
Figure 8 : Importance of tertiary sector enterprises
Activity 10
State whether the following statement is True or False.
1. People require only goods in their daily life.

2. Tertiary sector enterprises create jobs.
3. The tourism sector in Mauritius does not generate revenue.
4. The tertiary sector enterprises provide support to all other sectors.
Activity 11
Janice is a very talented and creative person. She has always won
the fi st prize in painting competitions at school or at university.
Janice has opened an enterprise in graphic design and her
customers are very satisfi d as Janice provides them with new and
unique ideas. Her enterprise has become famous.
(a) Identify the sector in which Janice works.


51
Activity 12
Read the case study below and fill in the table that follows.
Success story of Mark
Mark Elliot Zuckerberg (born May 14, 1984) is an American

computer programmer and Internet entrepreneur. He is one of
five co-founders of Facebook Incorporation, a social network
connecting people from different parts of the world.
Zuckerberg began writing software as a hobby in middle school,

with the help of his father and teacher. He enjoyed developing computer programmes,
especially communication tools and games.
Zuckerberg launched Facebook from his Harvard dormitory room on February 4, 2004.
Zuckerberg’s personal wealth is estimated to be $9.4 billion in 2012. Vanity Fair magazine
named Zuckerberg number 1 on its 2010 list of the Top 100 “most influential people of
the Information Age”.
(Source: Adapted: http://en.wikipedia.org/wiki/Mark_Zuckerberg)
Name of enterprise
Name the good/service
4.6 Discovering the quaternary sector

The quaternary sector refers to knowledge-based activities.
Examples of quaternary sector enterprises are information The quaternary sector refers to
and communication technology, consultancy, research and knowledge-based activities.
development and software design.
Scientific esearch Consultancy services Web designing
Figure 9 : Activities of enterprises in the quaternary sector
52

(a) Fishing is not considered as extraction of raw materials.
(b) Hairdressing is a service offered to customers.
(c) Banking is considered as a manufacturing process.
(d) Consultancy, research and development
are activities in the quaternary sector.
2. Group Discussion
Choose one business activity from the list below and explain its importance to your country.
(i) Fishing
(ii) Textile
(iii) Tourism
Business Activity:
Importance to Mauritius/Rodrigues:
KEY TERMS
Business activity refers to the production and distribution of goods and services to
satisfy the needs and wants of customers.
Economic sector is a type of business activity in a country.
Natural resources are gifts from nature and are not made by human beings.
Primary sector is concerned with the extraction of natural resources. It includes

fishin , farming and mining.
Quaternary sector refers to knowledge-based activities.
Secondary sector refers to the processing of raw materials into goods.
Tertiary sector provides services to consumers and enterprises.
53
Unit 5 I Economic systems: Resource allocation
Unit 5
Economic Systems: Resource Allocation
• differentiate between the public sector and the private sector
• explain the term economic system
• distinguish between a free market economy and a mixed economy
In this unit, you will learn how the public and private sectors use resources
in different economic systems to produce goods and services.
54
5.1 Discovering the public sector
In all countries, governments provide different types of

goods and services to their citizens through the public The public sector is owned and
sector. For example, in Mauritius there are public controlled by the government.
hospitals, state schools, public transport and other
important services.
The main objective of the public sector is to improve the welfare of the citizens rather than to
make profi . It also gives job opportunities to a number of people in ministries, district councils,
municipalities, public corporations and other government-owned organisations.
Coast Guard Services Forestry Services
Examples
of public
sector
activities
Fire Services Protection of the environment
Figure 1: Public sector activities
55
DID YOU KNOW?
The Mauritius Revenue

Authority collects taxes
in Mauritius and Rodrigues.
Individuals and Mauritius Revenue The public sector

businesses pay Authority collects (government) uses
taxes. taxes. taxpayers’ money to provide
goods and services.
Taxes provide revenue for the government to fund essential services such as healthcare,
education, social allocations and pensions, etc. Taxes are also used to finan e the provision
of vital public goods and services such as defence, highways, street lighting, a justice
system, etc. which would not be effectively provided by the private sector.
A Direct tax is referred to as a tax levied

Some basic facts on taxation: on a person’s income and wealth and is
• Taxes are a necessary part of life. paid directly to the government. There are
• Although taxation has often received a less several types of direct taxes, such as:
than favourable review by taxpayers, the
• Income Tax
benefits of tax tion are positive.
• Wealth Tax
• Taxes provide revenue to finan e the • Property Tax
provision of public goods and services that • Corporate Tax
benefit the community and the nation as a
whole.
• Taxes help support goods and services
such as our national defence, the police, Indirect tax is referred to as a tax charged
on a person who consumes the goods
protection agencies, healhcare, public and services and is paid indirectly to the
education and social services for low government. There are several types of
income families. indirect taxes, such as:
• The amount of revenue raised by taxes • Sales Tax
determines the amount of services the • VAT ( Value Added Tax)
government can afford to provide. • Excise Duty
• Custom Duty
Examples of taxes in Mauritius:
• Personal Income Tax

• Value Added Tax (VAT)
• Corporate Tax
• Custom Duty
56
The following is a conversation between Joseph and his father. It is about the public sector
which provides different types of government services.
Joseph: Dad, Reena told me that his uncle who works as a nursing
officer is retiring from his job. He has been working in public
hospitals for more than thirty years.
Father: Yes, he works for the public sector which is owned and controlled
by the government. The public sector provides services like
education, law and order, healthcare and transport.
Joseph: Dad, do you work for the public sector?
Father: Yes, I work as a fishe ies protection officer. My job is to prevent

illegal fishing and p otect marine resources.
Joseph: But where does the public sector get money to

provide goods and services?
Father: It comes from taxes which the government collects from
individuals and businesses.
5.2 Discovering the private sector
The private sector consists of private enterprises

which produce goods and services to make profit . The The private sector consists of private
government does not have the necessary resources to enterprises which produce goods
and services to make profit.
produce all the goods and services to satisfy the needs
and wants of the population. Similarly, it cannot provide
employment to all job seekers and therefore relies on the private sector for job opportunities.
The private sector has a wide range of activities in the primary, secondary, tertiary and
quaternary sectors.
57
A bookstore A “dholl puri” seller
Examples
A school canteen of private A retail shop
sector
enterprises
A hairdressing salon
Figure 2: Private sector enterprises
Activity 1
Choose the correct answer and write it in the space provided.
1. Enterprises in the private sector

A are owned and controlled by the government
B produce goods and services to make profit
C are owned and controlled by the Mauritius Revenue Authority
D are owned and controlled by public sector employees Answer _________
2. The public sector

A sells consumer goods to make profit
B manages small businesses
C is owned and controlled by the government
D employs a small number of workers Answer _________
3. The Mauritius Revenue Authority (MRA) collects taxes for

A the government
B the private sector
C other countries
D commercial banks Answer _________
4. Which is not a correct statement ?

A Law and order is part of public sector activities
B The public sector provides education to improve the literacy rate
C The government takes measures to protect the environment
D The main objective of the private sector is to produce free goods Answer _________
58
Activity 2
The bar chart below shows employment figu es in the public and private sectors of
country S for three different years. Study the chart and answer the following questions.
400000
2,000,000
350000 • In 2012, the private sector
1,800,000
employed 1,400,000 workers
300000 1,600,000 and the public sector employed
250000 1,400,000 1,000,000 workers.
Public sector
200000 1,200,000
Private sector
150000
1,000,000 • The private sector employed
800,000 more workers than the public
100000
600,000
sector for all the three years.
500000
400,000
200,000
• The number of workers employed
Year
in the public sector increased by
Year 200,000 from 2008 to 2012.
2008 2012 2016
Bar chart on the number of workers employed in the
public and private sectors in country S.
(a) In which year did the public sector employ the highest number of workers? __________
(b) In which year did the private sector employ the lowest number of workers? __________
(c) Calculate the increase in the total number of workers employed from 2008 to 2012
__________
(d) Calculate the percentage increase in the number of workers employed in the public
sector from 2012 to 2016, using the following formula.
Number of workers employed in the Number of workers employed in the public

public sector in 2016 sector in 2012
100 =
.......................................................................... ..........................................................................
...........................
Number of workers employed in the

public sector in 2012
59
5.3 Different economic systems

The basic economic problem of scarcity arises due to unlimited
wants and fini e resources. All countries face this problem, but An economic system is how a
the ways to deal with it vary from one country to another. An country uses its scarce resources
to produce goods and services to
economic system is how a country uses its scarce resources to
satisfy needs and wants.
produce goods and services to satisfy needs and wants.
The two common economic systems are the free market

economy and the mixed economy. Each one of them deals
differently with the basic economic questions of what to
produce, how to produce and for whom to produce?
How to
produce ?
What For whom

to produce ? to produce ?
Basic
economic
questions
Figure 3: Basic economic questions
What to produce?
This question is about the variety and amount of goods and services that an economic system
must produce to satisfy needs and wants. For example, private sector enterprises may decide
to manufacture more warm clothes during winter. The government may decide to build more
schools in order to improve the literacy rate.
In some African nations, for example in Liberia and Sierra Leone, the lack of medical care
facilities contributes to the proliferation of infectious diseases like Ebola. Consequently, more
resources are allocated to the provision of healthcare services.
The decision of what to produce involves an opportunity cost. For example, if the government
in a country decides to build a dam instead of a highway, then the opportunity cost of the dam
is the highway which has been sacrifi ed.
Food Clothing Shelter School

Figure 4: What to produce?
60
How to produce?
It is important to decide how to produce goods and services.
Enterprises use the method of production that enables them Labour intensive methods of
to make profit . Their decision of how to produce a good or production is when an enterprise
service depends on the cost and availability of resources. uses more labour than capital.
For example, if labour is readily available and costs less than
capital (machines and equipment) then enterprises may use
labour intensive methods of production. Capital intensive methods of
However, if capital is cheaper and produces more output than production is when an enterprise
uses more capital than labour.
labour, then an enterprise may use capital intensive methods
of production.
For whom to produce?
When the questions of what to produce and how to produce have been answered, the question
for whom to produce needs to be answered. Due to scarce resources, it must be decided who
gets the goods and services produced. For example, the government decides whether to
provide healthcare for the general public or homes for the elderly.
Private sector enterprises produce those goods and services for which consumers can pay and
there is potential for profit .
Produce for:
Children Youngsters The elderly

Figure 5: For whom to produce?
Activity 3
Tick ( ) the appropriate column(s).

What to How to For whom
Details
produce? produce? to produce?
A fi m decides to produce
(a) canned food instead of dried
fruits.
A mobile phone company uses
(b)
more machines and less labour.
The government provides more
(c)
healthcare services to the elderly.
The government encourages
(d) fi ms to employ more workers
instead of using machines.
A fi m announces that it uses
(e) green technology which helps
to protect the environment.
61
5.3.1 Free market economy
A free market economy is an economic system where

consumers and producers decide on what to produce, how A free market economy is an
economic system where consumers
to produce and for whom to produce. Most of the economic
and producers decide on what to
activities are undertaken by the private sector. Government produce, how to produce and for
involvement in economic activities is very little. whom to produce.
The high level of competition among enterprises contributes

to creativity and innovation. The country is more likely Producers use resources to produce
to progress thanks to the use of advanced technologies. goods and services.
Individuals are free to decide which goods and services they
want to consume.
However, many enterprises focus on making profits and

ignore the damages that they cause to the environment. For
example, some fi ms producing chemical products may dump
waste materials in nearby rivers.
Activity 4
profit , innovation, cheaper, how, competition, consume, environment
(a) In a free market economy consumers and producers decide what to
produce,___________ to produce and for whom to produce.
(b) Individuals may start their own business in order to make___________ .
(c) Firms use labour intensive method of production because labour is ___________
than capital.
(d) ___________ among fi ms helps to promote creativity and ___________ .
(e) Individuals are free to decide which goods and services that they want to
___________ .
5.3.2 Mixed economy

In a mixed economy, both the public and the private sectors A mixed economy is an economic
decide what to produce, how to produce and for whom to system in which both the private
produce. Examples of mixed economies are Mauritius, the and public sectors decide what to
United Kingdom, India and Australia. Actually most countries in produce, how to produce and for
the world have mixed economies. whom to produce.
The public sector provides education, healthcare, law and order as well as other services which are
important for the welfare of the society. Private sector businesses produce a wide variety of goods
and services to make profit . In some countries, the public sector plays a more important role in
economic activities. In many of them, government can enact laws in order to reduce pollution
and protect endangered animal species.
62
Mixed Economy
What to Public Sector Private sector

produce ? (Government)
Public Smart
Schools phones
How to For whom
produce ? to produce ?
?
Public Taxi
Hospitals services
Determined by the public (government)
and private sectors
Figure 6: Basic economic questions in a mixed economy

Bridges Tractors
Figure 7: Examples of goods and services

provided by the public and private sectors.
Activity 5
TRUE/FALSE
A mixed economy has public and private
(a)
sectors.
In a mixed economy, the government may

(b)
take measures to protect the environment.
The basic economic decisions of what, how

(c) and for whom to produce do not apply in a
mixed economy.
Nearly all countries in the world have a mixed
(d)
economy.
1.Write the appropriate word on each line.
______________________ ______________________
Intensive Intensive
More less
labour labour
less
more
capital
capital
63
TRUE/FALSE
The main objective of the public
(a)
sector is to make profi .
The private sector does not
(b) influen e economic activities in
a free market economy.
In a free market economy
competition among fi ms
(c)
promotes innovation and
creativity.
Firms use capital intensive
(d) methods of production because
labour is cheaper than capital.
The public sector provides
(e)
education and fi e services.
One advantage of the free
(f ) market economy is that it
reduces pollution.
3. Choose the correct answer and write it in the space provided.
(i) Which statement about the public sector is correct?

A. All workers employed in the public sector get equal pay
B. Public sector expenses are paid from taxpayers’ money
C. The public sector uses resources to produce free goods
D. A poor country does not have a public sector Answer___________
(ii) Which of the following is not found in a market economy?

A. Competition
B. Innovation
C. The government influencing p oduction decisions
D. The private sector producing goods and services to make profit Answer___________
(iii) Which of the following is the role of the government in a mixed economy?
A. Enacting laws to reduce smoking
B. Producing goods and services to make profi
C. Discouraging the use of new technology
D. Increasing unemployment Answer___________
(iv) A fi m decides to use more labour than machines because

A. machines are cheaper than labour.
B. labour is more expensive than machine.
C. workers are asking for higher pay.
D. labour is cheaper than machines. Answer___________
64
(v) A mixed economy is more likely to improve the welfare of the society than a free market
economy because
A. all workers get the same pay.
B. all private businesses make profit .
C. the government provides education and healthcare services.
D. the private sector provides goods and services only for the rich. Answer___________
(vi) Which of the following is an advantage of the free market economy?

A. Private sector activities contribute to the depletion of resources
B. The public sector provides free goods to society
C. Competition among fi ms leads to better quality products
D. Consumers have limited choice of goods and services Answer___________
(vii) Which of the following is not a basic economic question?

A. How to produce?
B. How to increase income?
C. What to produce?
D. For whom to produce? Answer___________
(viii) Mauritius is a mixed economy. What does this mean?

A. The public sector does not provide public goods
B. The private sector uses resources to produce free goods
C. The public and private sectors use resources to produce goods and services
D. The private sector does not export goods and services
Answer___________
4. T
he chart below shows the number of workers employed by the public and private
sectors during three different years in country T. Study the chart and answer the
questions that follow.
400000
350000
300000
250000
Public sector
200000
Private sector
150000
100000
500000
2005 2010
Year 2015
Year
(a) In which year did the public sector employ the highest number of workers? ____________
(b) In which year did the private sector employ the highest number of workers? ____________
(c) Calculate the difference between the total number of workers employed in 2005 and 2010.
_____________
(d) Calculate the percentage increase in the number of workers employed in the private
sector from 2010 to 2015. __________________
65
5. Group Activity (5-7 students) (Project work on bristol paper)
Materials required:
bristol paper, coloured felt pens/pens, glue, pictures and any other necessary items to present
the project.
Procedure
Each group will choose a theme and prepare a poster on bristol paper to make a ten minutes
presentation to the class.
THEMES
The Basic Public Private Free

Mixed
Economic Sector Sector Market
Economy
Questions Activities Activities Economy
KEY TERMS
Capital intensive methods of production is when an enterprise uses more capital

than labour.
Economic system is how a country uses its scarce resources to produce goods and
services to satisfy needs and wants.
Free market economy is an economic system where consumers and producers

decide what to produce , how to produce and for whom to produce.
Labour intensive methods of production is when an enterprise uses more labour

than capital.
Mixed economy is an economic system in which both the private and public
sectors decide what to produce, how to produce and for whom to produce.
Private sector consists of private enterprises which produce goods and services to
make profi .
Producers use resources to produce goods and services.
Public sector is owned and controlled by the government.
66
Unit 6
Entrepreneurial Culture
• discover different occupations
• distinguish between employment and self-employment
• discover entrepreneurial culture
• explain the reasons why people start their own enterprise
In this unit, you will discover the different types of occupation that people
undertake to earn a living and distinguish between employment and self-
employment. You will also learn about entrepreneurial culture and why
people set up their own enterprise.
67
Unit 6 I Entrepreneurial Culture
6.1 Earning a livelihood
People take up an occupation to earn a living. An occupation An occupation is a professional

is a professional activity undertaken by an individual in return activity undertaken by an
of a payment. individual in return of a payment.
Earning a living
Employment Self-employment
• An individual who works • An entrepreneur sets up

for someone else. He is his own enterprise.
called an employee. • She/he is the owner of the
• She/he takes a job business.
• She/he has to follow the • The enterprise generates
instructions of her/his profi .
employer. •Examples:
• She/he earns a salary or u A retail shop
wage. u Furniture making
• Examples: enterprise
u Factory worker u Farming
u Teacher u Repairs and maintenance
u Labourer u Restaurants
u Clerical officer
u Attendant
Figure 1: Earning a livelihood
The employer is someone who hires the services of people An employer is someone who hires
to assist him/her in his/her enterprise. On the other hand, an the services of people to assist him/
employee is someone who offers his/her services in return her in his/her enterprise in return
of a payment. The payment is usually in the terms of salary or of a payment.
wage.
An employee is someone who
Salary is paid to employees at the end of each month. Wage is offers his/her services in return of a
paid to employees on an hourly or weekly basis. payment.
Salary is paid to employees at the

end of each month.
Wage is paid to employees on an

hourly or weekly basis.
68
Activity 1
(a) People need to work to earn a living.
(b) People do not need money to satisfy their needs.
(c) An entrepreneur earns wages.
(d) An employee pays salaries or wages.
(e) An entrepreneur offers jobs to other people to assist him/

her in his/her enterprise.
Activity 2
Match each term in column A with the definition in olumn B. Write your answers
in the table which follows.
Column A Column B
Someone who offers his/her services in return
1 Salary or wage A
of a payment.
Someone who hires the services of people to
2 Occupation B assist him/her in his/her enterprise in return of
a payment.
3 An employer C Reward paid to employees for work done.
It is when the individual works for himself/

4 An employee D
herself, rather than working for an employer.
A professional activity undertaken by an

5 Self-employed E
individual in return of a reward.
Column A 1 2 3 4 5
Column B
69
6.2 Discovering different occupations
There are a variety of occupations which people may take up to earn a living. Some examples
are given below.
Photographer
Doctor
Mason
Discovering
different
occupations
Fire figh er
Mechanic
Farmer Shopkeeper
Figure 2: Examples of occupations
Activity 3
Mr Burton is an entrepreneur and he employs his wife Tara as the manager of their biscuit
factory. They have five children and each of them have a different occupation. Their son Danny
is a doctor and owns a clinic. Hemish is a lawyer, whereas Danish is an accountant. The eldest
daughter Mila is a fashion designer and her sister, Lara is a professional photographer.
Identify the occupation of Mr Burton and his family members.
Family Member Occupations

Mr Burton
70
Activity 4
Observe the pictures provided and state the respective occupation they represent.
Use the list provided below.
carpenter, car mechanic, mobile technician, fashion designer, fruit seller, chef, medical
practitioner, educator, lawyer, policewoman, hairdresser
Occupation Occupation
71
6.3 Factors influencing choi e of occupation
There are a number of factors that influen e the choice of occupation of an individual. The table
below describes some factors which determine why some people would choose a particular
occupation over others.
People choose jobs depending on

1. Salary and wage
the salary or wage earned.
People choose a job depending

2. Qualifi ations
on their qualific tions.
Some people choose their job

3. Skills and talent
according to their skills and talent.
Some people seek a permanent job

4. Job security
rather than a temporary one.
People usually prefer to travel short

5. Travelling distance
distances while going to work.
Some people choose jobs where

6. Career prospects they can have opportunities for
promotion.
Table 1: Factors influencing choi e of occupation
72
6.4 Self-employment
Self-employment is taking up an occupation where the

Self-employment is taking up an
individual works for himself/herself, rather than working for occupation where the individual
an employer. An individual may have specific skills that allow works for himself/herself, rather
him/her to run his/her own business. than working for an employer.
For example, some entrepreneurs may choose to set up their

own entreprise like a beauty parlour, shop, bakery or factory.
The choice of being self-employed is not a simple decision.

By choosing self-employment, individuals usually give up the
possibility of having a job that brings a secured earning. For
example, if an entrepreneur is unsuccessful in running his/her
business, he/she will not earn any profi .
Vegetable seller
Hairdresser Taxi owners
Self-employment
Figure 3: Self-employment
6.5 Why people start their own enterprise?
There are different reasons why people start their own enterprise.
Why start an
enterprise?
To be one’s To use one’s To achieve

To earn profi
own boss talent and skills personal goals
Figure 4: Reasons for starting up an enterprise.
73
Reasons for starting an enterprise

Entrepreneurs earn profit or the efforts that they put in
To earn profit
their enterprise.
Entrepreneurs have the freedom to take decisions about

To be one’s own boss
the business without taking orders from someone else.
Entrepreneurs use their talents and skills to set up an

To use talent and skills
entreprise.
Entrepreneurs take initiatives and seize opportunities to

To fulfill on ’s ambition
achieve their personal goals like fame, wealth and success.
Table 2: Reasons for starting up an enterprise.
6.6 Discovering entrepreneurial culture
Entrepreneurial culture is
encouraging individuals to set Entrepreneurial culture is
up their own enterprise rather encouraging individuals to set up
than seeking a job. their own enterprise rather than
seeking a job.
These individuals are usually
motivated to innovate, create
and take risks by setting their Start-up enterprises are
own enterprise. entrepreneurial ventures that aim
to offer an innovative product,
As a result, entrepreneurs have process or service.
developed their start-ups.
A start-up enterprise is an
entrepreneurial venture that
aims to offer an innovative
product, process or service.
6.6.1 Factors influencing e trepreneurial culture

There are several factors that influen e the entrepreneurial culture. Some of them are illustrated
below.
Family Knowledge, skills Business Support from the

enterprises and education environment government
Figure 5: Factors influencing e trepreneurial culture
Some individuals have started their own enterprise because they possess some talent and skills.
Others have continued the family business to earn a living. Individuals are often encouraged by
the government to set up their own enterprise. One of the aims of the government is to instill
the entrepreneurship culture in Mauritius and Rodrigues, and create a “nation of entrepreneurs”
(Source: 10- years SME Master Plan 2017).
74
Activity 5

Pastry Delights
After leaving school, Shaan was employed as a waiter. At

school he was interested in Home Economics and used
to prepare delicious pastries. One day, his friend ordered
some pastries from him. Later on, they encouraged him
to set up his own enterprise instead of working as a waiter.
As Shaan was very creative and innovative, his customers
were satisfi d and his business grew. He employed two
friends to assist him in his daily work. Now he owns a
well-known catering enterprise. His catering enterprise
has become popular and he has decided to open another
branch in Grand Bay. Shaan has been able to use his
talent and skills to set up a successful enterprise.
1. After leaving school, Shaan was

A unemployed.
B working as a mason.
C employed by a restaurant as a waiter.
D self-employed. Answer:
2. What factors have contributed for Shaan’s enterprise to be successful?

A He was unwilling to work
B He was very creative and innovative
C He did not know how to prepare delicious food
D He wanted to be a painter Answer:
3. When did Shaan expand his enterprise?

A Before completing his studies
B In a birthday party
C While preparing food
D When his business became popular Answer:
4. When the enterprise became famous, Shaan decided to

A close his enterprise.
B open another branch in Grand Bay.
C open another branch in another country.
D do nothing. Answer:
75
6.7 Steps towards successful entrepreneurship
Successful entrepreneurs are identified th ough common characteristics such as:
• having new ideas
• creativity
• innovation
• hard work
• motivation
• decision-making
• risk-taking
• perseverance
The following steps are usually taken by entrepreneurs to achieve success.
Continuously improve every

aspect in their enterprise
Persevere to do their best

without fear of failure
Work hard to eliminate risk

of losses and failure
Take initiatives to set up

enterprise and bring in financ
Figure 6: Steps taken by entrepreneurs to achieve success
76
Activity 6
Lux Candles
Jamie and Simon worked in a large candle factory. They decided to use their experience to
start their own candle making enterprise and named it, “Lux Candles”. At fi st, they lacked
fi ance and took advantage of the fi ancial incentives offered by the government. They were
able to contract a loan at a low interest rate. They purchased equipment, rented a factory
and hired employees. The entrepreneurs took further training to improve the quality of the
candles they could make.
The candles are sold around the island and are famous for their unique designs and fragrances.
(a) The entrepreneurs were creative.
(b) The products attracted many customers for their unique designs.
(c) The products were continuously improved.
(d) The entrepreneurs did not have any training.
(e) The entrepreneurs obtained finan e easily.
(f ) The entrepreneurs feared failure and closed their enterprise.
77

1. Fill in the table below indicating the occupation of your parents and/or other family members.
Family member Occupation
2. Explain two differences between running your own bakery and being employed in a
big bakery.
Difference 1:
_____________________________________________________________________________
Difference 2:
_____________________________________________________________________________
3. Explain two advantages of having an entrepreneurial culture in Mauritius.

Advantage1:
_____________________________________________________________________________
Advantage 2:
_____________________________________________________________________________
KEY TERMS
Employee is someone who offers his or her services in return of a payment.
Employer is someone who hires the services of people to assist him/her in his/her
enterprise in return of a payment.
Entrepreneurial culture is encouraging individuals to set up their own entreprise

rather than seeking a job.
Occupation is a professional activity undertaken by an individual in return of a

payment.
Salary is paid to employees at the end of each month.
Self-employment is taking up an occupation where the individual works for himself/

herself, rather than working for an employer.
Start-up enterprises are entrepreneurial ventures that aim to offer an innovative

product, process or service.
Wage is paid to employees on an hourly or weekly basis.
78
Unit 7 I Enterprising Spirit
Unit 7
Enterprising Spirit
• outline the benefits of h ving an enterprising spirit
• describe the attributes and attitudes of an enterprising person
• identify the opportunities and challenges in setting up an enterprise
In this unit, you will discover the attitudes and attributes that entrepreneurs
require to set up an enterprise. You will also learn about opportunities
and challenges in setting up an enterprise.
79
7.1 Being enterprising
An enterprising person is someone who sees business

opportunities in all areas. An enterprising person is someone
who sees business opportunities in
all areas.
Enterprising people have a positive attitude/mindset and
possess personal characteristics (traits). The following table
describes some of the qualities of enterprising people.
Personality
An entrepreneur:
characteristics
is passionate about
1 Passionate everything he does. He puts
all his efforts in what he does.
is ambitious to convert his

business ideas into reality and
2 Determined
is determined to be
successful.
Good at is able to take appropriate

3
decision-making decisions.
can take risks and tries hard to

4 Risk taker
avoid failure.
is able to cope with difficultie

5 Resilient
and does not give up.
Table 1: Qualities of enterprising people
80
7.2 Enterprising spirit

The enterprising spirit of entrepreneurs is the key to the
success of their business. An enterprising spirit is having the The enterprising spirit is to have
willingness and ability to undertake an activity, project or the willingness and ability to
enterprise. undertake an activity, project or
enterprise.
An enterprising person is someone who likes to take initiatives,
and be creative and innovative to acheive the goals set.
Activity 1
Clara Fashion
The following is a statement of Clara, the founder of

a successful clothing brand, who has her own fashion
boutique.
‘My enterprise is successful because I have an

enterprising spirit where I have taken the initiative
to set forth a new style of fashion in the products
I sell. I enthusiastically accept challenges, look at things from different perspectives, think
innovatively and put all my efforts to make the enterprise a success. I value my employees
and give them responsibilities. They are encouraged to put their creative ideas into practice.’
(a) Clara has taken an initiative to try a new fashion style in her
enterprise.
(b) The entrepreneur does not have an enterprising spirit.
(c) Clara is willing to accept challenges.
(d) Creativity and innovation helped her business succeed.
(e) The creative ideas of employees of the fashion boutique are
not respected.
7.3 Attitudes of entrepreneurs

Attitude is the way an entrepreneur thinks and reacts in
a given situation. A positive attitude or mindset allows Attitude is the way an entrepreneur
thinks and reacts in a given
entrepreneurs to transform difficultie faced in an enterprise situation.
into opportunities.
A negative attitude will not help entrepreneurs to move ahead.

In Table 2, you will find a list of positive and negative attitudes
of entrepreneurs that affect the success of an enterprise.
81
Positive attitudes of entrepreneurs Negative attitudes of entrepreneurs

• Commitment • Negligence
• Determination • Lack of willpower
• Perseverance • Lack of diligence
• Confiden e • Avoidance of risks
• Motivation • Lack of motivation
• Passion • Laziness de
a v in g th e right attitu
H the
ant part in
is an import velopment
de
Table 2: Positive and negative attitudes of entrepreneurs growth and rprise.
of an ente
7.4 Attributes of entrepreneurs

Attributes affect the ways in which entrepreneurs behave in running their enterprises. Attribute
is an entrepreneur’s quality to develop his/her ideas. Entrepreneurs’ attributes determine the
success of their enterprise. For instance, successful entrepreneurs often have the following
attributes.
Attribute is an individual’s quality
Dynamic to develop his/her ideas.
Responsible
Confiden
ATTRIBUTES
Enthusiastic
Creative
Talented
Hardworking
Figure 1: Attributes of successful entrepreneurs

Activity 2
Classify the following into attitudes or attributes in the table below.
Commitment, Talented, Negligent, Enthusiastic, Confiden ,

Passionate, Hardworking, Lazy
Attitudes Attributes
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7.5 Business opportunities and challenges

People with an enterprising spirit always look for business opportunities. However, they often
have to face challenges and try to find ays to overcome them.
7.5.1 Business opportunities

A business opportunity is a situation that allows
entrepreneurs to set up or develop an enterprise. An A business opportunity is a
situation that allows entrepreneurs
entrepreneur can seize opportunities to venture into a to set up or develop an enterprise.
business activity using resources that are available.
Examples of business opportunities
S arah has some culinary skills so she decides to make

use of her skills to set up her own bakery.
Johnny has bee-keeping skills so he decides to make

use of his skills and employ people to set up his
enterprise.
lexandre is creative and has innovative skills. So, he

A
decides to set up an enterprise for car tuning.
L eena is aware of the government support in terms

of advice and financial assistan e.
So, she decides to turn her hobby of nail polishing
into a full-time job by setting up her own nail bar.
7.5.2 Business challenges

A business challenge is a difficul situation which an
entrepreneur has to overcome with smart ideas. The challenge A business challenge is a difficult
situation which an entrepreneur
that Sarah will face as an entrepreneur is to produce the fines has to overcome with smart ideas.
quality cakes to attract more customers to her shop when other
bakeries are also working hard. She will have to improve the
cakes she offers for sale on a regular basis.
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The challenges that the entrepreneurs might face are:
Examples of business challenges
I have to produce finer I have to improve the

quality cakes to attract quality of my honey and
more customers. build better relationships
with my employees.
Sarah Johnny
I have to offer products at I have to manage my

reasonable prices to avoid funds properly in order to
customer complaints. avoid losses.
Alexandre Leena
Activity 3
Sarah, Johnny, Alexandre and Leena have decided to set up their own enterprises.
Identify their (i) business opportunity (ii) their challenges (iii) the ways in which they
could overcome their challenges. The first one has al eady been worked out for you.
Business Ways to overcome

Entrepreneur Challenges
Opportunity the challenges
• Produce finer quali y cakes Improve the cakes

Sarah Culinary skill
• Attract more customers she bakes
Johnny
Alexandre
Leena
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Activity 4
Group Discussion
Think about a product which you could make and sell to your classmates. Use the skill(s)
that you have to turn it into a business opportunity. List the challenges that you might
face and how you would overcome them.
Product
Skill(s)
Business Opportunity
Challenge(s)
Way(s) to overcome
the challenge(s)
1. Match each term in Column A with the definition in olumn B. Write your answers
in the table which follows.
Column A Column B
are difficult sit tions which
1 Attribute A entrepreneurs have to overcome with
smarter ideas.
is an individual’s quality to develop his
2 Enterprising spirit B
ideas.
is the way an entrepreneur thinks and
3 Business opportunity C
reacts in given situation.
is having the willingness and ability
4 Business challenges D to undertake an activity, project or
enterprise.
is a situation that allows entrepreneurs
5 Attitude E
to set up or develop an enterprise.
Column A 1 2 3 4 5
Column B
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Vishal, a young graduate, was listening to the conversation of some

elderly citizens. They were complaining about low production of fresh
milk in shops. He realised that many people are willing to buy fresh
milk but that it was not available. He thought that it is a good business
opportunity and decided to set up a farm to provide dairy products to
the inhabitants which could eventually give them jobs. He was aware
that the Ministry of Agriculture was providing some incentives to
support young entrepreneurs to set up their farms.
It has been two months now since Vishal has set up his farm. He rears three cows, from which
he obtains thirty litres of milk daily. By word of mouth, most inhabitants of the village buy fresh
milk from him. However, the young entrepreneur is facing challenges in the smooth running
of the business. Vishal is planning to expand his enterprise but his savings are insuffici t.
The other challenge faced by Vishal is competition. His neighbour, Reena, has also started the
business of selling milk to the inhabitants. Vishal has decided to take actions to overcome
these challenges. His aim is to double his sales.
(a) Identify the business opportunity of Vishal.
___________________________________________________________________________
(b) Identify the challenges faced by Vishal and describe the ways in which he has decided to
overcome them.
Challenge 1:_________________________________________________________________
Way 1:______________________________________________________________________
Challenge 2:_________________________________________________________________
Way 2:______________________________________________________________________
(c) State another challenge that Vishal could face in the future and suggest a way that he could
tackle it.
___________________________________________________________________________
KEY TERMS
Attitude is the way an entrepreneur thinks and reacts in a given situation.

Attribute is an individual’s quality to develop his ideas.
Business challenge is a difficul situation an entrepreneur has to overcome with smart
ideas.
Business opportunity is a situation that allows entrepreneurs to set up or develop an
enterprise.
Enterprising person is someone who sees business opportunities in all areas.
Enterprising spirit is having the willingness and ability to undertake an activity, project
or enterprise.
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Unit 8 I Income and Expenses
Unit 8
Income and Expenses
• identify the different sources of funds
• recognise income and expenses of an enterprise
• calculate the difference between income and expenses

In this unit, you will discover the importance of funds to set up an
enterprise and the different sources of funds. You will also learn about
profits and losse .
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8.1 Funds in an enterprise

Start-up capital refers to the amount
Start-up capital refers to the amount of money an
of money an entrepreneur needs to
entrepreneur needs to set up an enterprise. Finding the
set up an enterprise.
required funds is an important factor for the success of a
business. Funds are also called finan e, money or capital.
Funds = Finance = Money = Capital
Activity 1
Read the conversation below and carry out the activity that follows.
Start up the
Altaf, Alexia and Nishi are three friends who want to explore their
enterprise
business idea. However, they need funds to start up their enterprise.
Altaf: We need start-up capital. Pay for raw

materials
Alexia: We do have some.
Nishi: It would not be enough.
Alexia: But why?
Altaf: B
ecause to start up the enterprise, Pay for tools
several expenses will have to be and equipment
incurred.
Nishi: We have to pay for raw materials,

tools and equipment as well as advertising.
Pay for
Altaf: We also have to pay for the rent of advertising
the premises.
Nishi: Hmmm! Now I see. So we need money

Pay rent
in an enterprise for different reasons.

(a) Funds is a key factor for the success of an enterprise.
(b) An entrepreneur does not need funds to set up an enterprise.
(c) An enterprise does not incur expenses when starting up.
(d) Money is needed for several reasons in an enterprise.
(e) There are different sources of funds to start up an enterprise.
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Activity 2
Read the case study below and fill in the blanks with the app opriate words.
“Les Bougies Bijoux’’
Hanna and Kiyah have acquired skills in making decorative candles.

Therefore, they have planned to set up an enterprise “Les Bougies
Bijoux’’.
Hanna and Kiyah are not able to make their dream come true since
they have difficulties in arranging for funds to set up their enterprise.
They did manage to obtain some money as start-up capital from their
savings but it is not suffici t.
Therefore, they borrowed money from close friends to pay expenses such as rent of
premises.
Hanna and Kiyah have the required ________________in making products with candles.
Initially, they faced difficultie to find _________________. The ___________________
capital was not enough for them to set up “Les Bougies Bijoux’’. They have been able to
_____________________ some money to make their dream come true. Eventually, they
had to __________________ additional funds as they had to pay for _________________.
8.2 Sources of finan e

Finance refers to the capital required by an entrepreneur to run his/her enterprise.
Funds can be raised from different sources. Entrepreneurs usually use personal savings to set
up their enterprises. The government also provides financial assistance such as grants to assist
entrepreneurs in their projects. Examples of funds are borrowings from friends or relatives and
contracting loans from banks. When money is borrowed, it has to be repaid after a given
period of time together with interest.
Sources of Finance
Personal Savings Borrowings Government
Friends
and Relatives Financial
Assistance
Banks (loan)
Figure 1: Sources of finan e
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1. Personal savings: It is the money set aside by an individual Grant is a sum of money provided
for future use. Such savings can be kept in a bank account by the government that needs not
and it may represent a significa t fund when accumulated be repaid.
over a number of years. Personal savings are commonly used
as start-up capital as they are readily available and need not
be repaid. Interest is the sum of money paid
on the amount borrowed.
2. Borrowings: Funds can be borrowed from:
• individuals (friends or relatives) A commercial bank is a financial
• banks (commercial banks) institution that accepts deposits,
• government bodies (SME Mauritius) provides loans and other services.
3. Government financial assistance (Grant): Grants are

provided by the government to enterprises on certain strict
conditions to set up their own business and to create jobs.
Activity 3
Match each term in Column 1 with the correct definition in olumn 2. Write your
answers in the table which follows. The first one has een done for you.
Column 1: Terms Column 2: Definition
refers to the amount of money an entrepreneur needs to

1 Source of finan e A
set up an enterprise.
is a sum of money provided by the government that needs
2 Personal savings B
not to be repaid.
3 Bank loan C is the provision of fund to finan e the business activities.
consist of borrowed funds from either individuals (friends

4 Interest D
or relatives) or institutions like banks.
5 Grant E is the money set aside by an individual for future use.
6 Borrowings F is an amount of money borrowed from a commercial bank.
7 Start-up capital G is the sum of money to be paid on the amount borrowed.
Term 1 2 3 4 5 6 7
Definitio C
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8.3 Income and expenses in an enterprise
As enterprises are set up, there are a number of monetary Income refers to money flowing
transactions that take place, such as income and expenses. into the business.
Income is money that fl ws into the business through the
sale of goods and services. Expenses are payments whereby Expenses are payments whereby
money fl ws out of the business in the form of payment of money flows out of the business in
raw materials, electricity bills and license fees. the form of payment.
Expenditure = Expenses
Income INFLOWS
• Sale of goods and services
• Interest received from bank
• Rent received
• Commission received Enterprise
Expenses
• Purchase of goods for resale
• Purchase of raw materials
• Electricity bills
• License fees
OUTFLOWS • Wages
Figure 2: Income and expenses in an enterprise
Activity 4
Classify the items below into business income or expenses.

rent paid, advertising, sale of goods, wages, electricity bills, interest received,
purchase of goods for resale (inventory), insurance cost, transport cost,
commission received, loan interest paid, internet bills
Income Expenses
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8.3.1 Profit and los

Entrepreneurs are motivated by profit which is the reward for a Profit is the positive difference
successful enterprise. Profit is the positive difference between between income and expenses.
income and expenses. A negative difference between income
and expenses is termed as loss. Entrepreneurs usually strive Loss is the negative difference
hard to avoid making losses. between income and expenses.
To calculate profit or los , the formula can be used : Income > Expenses = Profit
Expenses > Income = Loss
Income - Expenses = Profit or oss
• When Income is greater than Expenses, a profit is mad .

• When Expenses are greater than Income, a loss is incurred.
The table below shows the calculation of profit or los .
Situation Income (Rs) Expenses (Rs) Profit / oss (Rs) Profit or oss
Profi
A 100,000 80,000 100,000 - 80,000 = 20,000
Income > Expenses
Loss
B 100,000 110,000 100,000 -110,000 = 10,000
Expenses > Income
Activity 5
Nelicia is a young entrepreneur who recently set up her own enterprise. Below is a list
of her income and expenditures incurred.
(a) Identify each of the items listed as an income or as an expenditure.
Income (Rs) Expenditure(Rs)

(i) Rent of showroom Rs 5,000
(ii) Paid delivery van expenses Rs 2,000
(iii) Paid advertising Rs 2,300
(iv) Sales revenue Rs 150,000
(v) Purchase of goods for resale Rs 75,000
Paid electricity, and telephone bills,
(vi)
internet facilities and fuel for Rs 2,700
(vii) Commission received Rs 8,000
Total
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(b) Calculate (i) the total income.

(ii) the total expenditure.
(c ) Using the table above, find whether Nelicia made a p ofit or a loss y the end of year.
Total Expenditure /
Total Income (Rs) Profit / oss (Rs)
Expenses (Rs)
Year 1
___________________ ___________________ ___________________
1. (a) Make a list of the probable expenses of a school canteen.
Expenses incurred
1
(b) Identify the main source of income of the canteen.
(c) Write down the formula to calculate profit or losses in an e terprise.
Total __________________ - Total ____________________ = ____________________
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(d) (i) Fill in the blanks in the table below.
Year Income (Rs) Expenses (Rs) Profits/ osses (Rs)
1 50,000 (60,000)
2 (75,000) (5,000)
3 (85,000) 30,000
4 100,000 10,000
5 (95,000) (15,000)
6 120,000 20,000
KEY TERMS
Commercial bank is a financial institution th t accepts deposits, provides loans and

other services.
Expenditure / expenses refer to the money spent in running of an enterprise.
Grant is a sum of money provided by the government that needs not be repaid.
Income refers to money fl wing into the business.
Interest is the sum of money paid on an amount borrowed.
Loss is the negative difference between income and expenses.
Profi is the positive difference between income and expenses.
Start-up capital refers to the amount of money an entrepreneur needs to set up an

enterprise.
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Unit 9 I Accounts for Enterprise
Unit 9
Accounts for Enterprise
• define the erm ‘bookkeeping’
• describe the importance of bookkeeping
• distinguish between the role of a bookkeeper and an accountant
• identify the different documents used in an enterprise
In this unit, you will discover the initial stages of recording data, the role of
bookkeepers and the different documents used in an enterprise.
95
9.1 Business transactions

Business transactions are activities
Business transactions are activities that affect the financial that affect the financial positions
positions or operations of an enterprise. Each business or operations of an enterprise.
transaction influen es the assets and liabilities of the
enterprise. Examples of assets include cash, equipment, Asset is what a business owns.
machines, land and buildings. Examples of liabilities include Examples include cash, equipment,
unpaid expenses or a bank loan. machine, land and building.
Purchases, sales and expenses are the common types of

Liability is what the business owes.
business transactions in an enterprise and they can be paid in
Examples include unpaid expenses
terms of notes and coins, cheque or payment card. Examples
or a bank loan.
of business transactions are shown in the table below.
Purchases Sales Expenses

Purchase of goods for resale Sales of goods for cash Using card to pay bills
Table 1: Examples of business transactions
9.2 Bookkeeping
Bookkeeping is the process of recording business transactions Bookkeeping is the process of
in an accurate and systematic way. Entrepreneurs need to keep recording business transactions in
a record of all income and expenses in an orderly manner so as an accurate and systematic way.
to run the business effectively.
Activity 1
Tick ( ) for proper record keeping and cross ( X ) for improper record keeping.
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9.2.1 Role of bookkeeper and accountant

An accountant is a person who has
A bookkeeper plays an important role in preparing the
the responsibility of preparing the
financial records of a business. He or she must have the
accounts of a business.
knowledge and skills to keep a record of the different business
expenses. Business expenses wage payments, electricity bills
or tax payments.
A bookkeeper is a person who
A bookkeeper keeps invoices, receipts and data of all records the daily transactions of a
transactions whereas the accountant prepares the final business.
accounts from the information provided by the bookkeeper.
Harry, a young entrepreneur, has recently set up his own sportswear

business. His bookkeeper has the responsibility to record all the
business transactions on a daily basis and provides information
to his accountant.
Hey Harry! How is your new business
doing? And why is there such a large
pile of paper near your desk?
Lots of work are pending. My

accountant told me to sort out the
business documents.
9.2.2 Importance of bookkeeping
Hey John, tell me how

bookkeeping helps you
in your business.
Yes Rita. It helps me in

many ways! It gives me a
clear picture of how the
business is running.
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Bookkeeping is the first basic s ep of the accounting Note: Nowadays, many businesses
process. It helps to classify, report and analyse data of an simplifies the process of
enterprise. bookkeeping by using software
according to their needs.
Bookkeeping also helps to:
• calculate whether the business is making a profit or
loss
Financial statements are reports
• s how how much money the business has received
prepared by accountants to present
and how much it has spent the financial performance of an
• know the amount of credit and cash sales/ purchases enterprise.
• save time when preparing financial statements
• k now the financial position of the business, that is,
what the business owns (assets) and what the business
owes (liabilities)
Activity 2
(a) Bookkeeping is to record all business transactions.
(b) Payment for any business transaction can be made by cash only.
(c) Good bookkeeping practices enable an accountant to accurately

calculate the profit or loss made y a business.
(d) An accountant is a person who records daily transactions of a

business.
Activity 3
Fill in the blanks with the words provided below.
liability, bookkeeper, assets, bookkeeping, accountant
(a) Record keeping of a business is an important role of a the __________________.

(b) __________________ is the process of recording business transactions in an
accurate and systematic way.
(c) __________________ are resources like machines and equipment owned by a
business.
(d) A __________________ is what the business owes to other people.
(e) An __________________ is a person who has the responsibility to prepare the
accounts of the business.
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Activity 4
Give three reasons to explain why keeping accurate records is important for a business.
(i)____________________________________________________________________.
(ii)___________________________________________________________________.
(iii)___________________________________________________________________.
Activity 5
Classify the following items into assets and liabilities.

Bank loan Equipment Land Unpaid expenses
Building Cash in hand Cash at the bank Machinery
Assets Liabilities
9.3 The process of recording business transactions
Trading
of goods Buying and selling of goods and services take the form of
different business transactions like purchases, sales and expenses.
and services
Collection
of data Different transactions are posted in their respective accounts.
Recording Bookkeepers identify and collect data from different

of data business documents such as invoice, receipts and cheques.
Preparation The accountant prepares the final a counts from the data
of accounts collected and recorded by the bookkeeper.
Figure 1: Process of recording business transactions

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9.4 Modes of payment

There are different modes of payment such as cash, cheques and cards.
Mode of
Pictures Explanation
payment
The buyer pays money in the form of

(i) Cash
notes and coins to the seller.
Cheque is a convenient and safe mode

of payment. Most businessmen have a
bank account to facilitate their business
transactions. When a bank account
(ii) Cheque
is opened, upon the request of the
entrepreneur, the bank may provide
a cheque book to the entrepreneur to
make payments.
Payment cards such as credit cards

and debit cards enable their owners
(iii) Card
(the cardholders) to make a payment
through an electronic fund transfer.
Table 2: Modes of Payment
Activity 6
State whether the following transactions are paid by cash, cheque or card.
Tick (√) as appropriate.
Transactions Cash Cheque Card
Sold goods in cash
Electronic transfer device used to pay purchases
Paid rent by cash
Bought motor vehicle and paid by cheque
Paid utility bills by electronic payment card
Paid supplier of goods and arranged payment through bank
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9.5 Business documents

Business documents are original
All entries recorded by a bookkeeper are supported by a
records which represent financial
number of documents.
transactions carried out over a
given period of time.
Business documents are original records which represent
financial t ansactions carried out over a given period of time.
Cheque Quotation Key information in a business

document:
• Date of transaction
Business • Parties (buyer/seller)
Documents involved
Receipt • Amount of money
Order
• Type of business
transaction
Invoice • Document reference
number
• Seal of the business
Figure 2: Common business documents
I. Quotation
A quotation is a document which a seller
issues upon the request of a customer.
It provides information on the following:
E
• Product details
• Selling price per unit
L
• Terms of payment like cash or credit
P
and any discount
• Expected date of delivery
M
• Total payment due
S A
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II. Order
An order is a confi med request from the
buyer to the seller. It includes information
on the following:
E
• details about the product
• mode of payment
PL
AM
S
III. Invoice
An invoice is a document that specifies the
amount and cost of goods or services that
have been provided by a seller. It includes
E
the following information:
L
• product details
P
• tax rate
• VAT registration number
AM
S
102
102
IV. Receipt
A receipt is a document that confi ms the
payment of a transaction.
E
It includes the following:
L
• payment details
P
• discounts and taxes (if any)
• net amount paid
AM
S
V. Cheque
A cheque is a written order directing a bank to pay a specified sum of mone .
It includes the following:
LE
• name of the issuing business
P
• signature of the issuing party
• amount paid
S AM
Value Added Tax (VAT) is a percentage tax added onto

the price of a good or service.
VAT registration number is an identifier number that

indicates that the shop is VAT registered.
The VAT rate in Mauritius is 15% on goods and services.
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103
Activity 7

(a) Receipts are important business documents.
(b) The VAT rate in Mauritius is 10% on goods and services.
(c) Date of a business transaction is an essential information

for the bookkeeper.
(d) Product details are shown on a cheque.
(e) An order is a confirmed request from the buyer to the seller.
(f ) A quotation is a document which a seller issues upon request

from a customer.
1. Choose the correct answer and write it in the space provided.
(i) Payment of any business transaction can be made by

A. cash.
B. cheque.
C. card.
D. all of the above. Answer: _______
(ii) Which one of the following is not a business document?

A. Cheque
B. Quotation
C. Inventory
D. Order Answer: _______
(iii) A receipt is a document

A. that confi ms payment of a transaction.
B. used when credit transactions are made.
C. that does not include tax paid.
D. which directs a bank to pay a specified sum of mone . Answer: _______
(iv) An asset is
A. a business document.
B. owned by a business.
C. what the business owes.
D. a business transaction. Answer: _______
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2. State one difference between a bookkeeper and an accountant.

_______________________________________________________________________
3. Identify and explain two reasons why business documents are important in an enterprise.
Reason 1:______________________________________________________________
Explanation:____________________________________________________________
Reason 2:______________________________________________________________
Explanation:____________________________________________________________
4. Fill in the blanks. The first let er of the word has been given to help you.
(a) B_________________ is the recording of financial transactions and information

regarding a business on a day-to-day basis.
(b) An a_________________ is a person who has the responsibility to prepare the accounts
of the business.
(c) The most common types of payment methods are cards, c_________________ , and
cash.
(d) An a_________________ is something a business owns and which can provide future
benefit .
(e) L_________________ is what the business owes to other people. It is an obligation
that is payable to another person or business.
(f ) A r_________________ is a written acknowledgement that a person or institution has
received money in payment following a sale or provision of a service.
(g) An i_________________ is a document sent to a buyer that specifies the amount and
cost of products or services that have been provided by a seller.
(h) A q_________________ is a document that a seller provides to a buyer that offers
Accounts for Enterprise
goods and services at a stated price, and under specified onditions.

Activity 5.
5. Identify ten wordsLets Play! Find the words used in activity 4 from the puzzle .
on business transactions in the word search below.
Below the ten terms have been given to you
BOOKKEEPING LIABILITY
ACCOUNTANT RECEIPT 105
105
DOCUMENTS INVOICE
CHEQUES ACCOUNTING
ASSET QUOTATION
6. Practical Task (Visit a business)
Visit a business enterprise in your locality or speak to a business owner, and:
(i) Find out examples of different types of transactions that take place in the business on a
daily basis.
(ii) collect samples of business documents used in the enterprise.
KEY TERMS
Accountant is a person who has the responsibility to prepare the accounts of the
business.
Asset is what a business owns. Examples include cash, equipment, machine, land
and building.
Bookkeeper is a person who records the daily transactions of a business.
Bookkeeping is the recording of business transactions in an accurate and

systematic way.
Business documents are original records which represent financial t ansactions

carried out over a given period of time.
Financial statements are reports prepared by accountants to present the financial

performance of an enterprise.
Liability is what the business owes. Examples include unpaid expenses or a bank
loan.
Value Added Tax (VAT) is a percentage tax added onto the price of a good or service.
VAT registration number is an identifier number th t indicates that the shop

business, is VAT registered.
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Unit 10 I Cash and Bank Transactions
Unit 10
Cash and Bank Transactions
• identify cash and bank transactions
• differentiate between cash and bank transactions
• calculate cash and bank transactions of an enterprise
In this unit, you will discover cash and bank transactions of an enterprise.
You will also calculate cash and bank balances.
107
10.1 Business transactions

Business transactions are
Enterprises are engaged in business transactions and they are activities that affect the financial
very careful in managing their money. position or operations of an
enterprise.
Read the conversation between Samy and Aryaan.
Samy: Hello Aryaan. I heard you have set up

an enterprise.
Aryaan: Yes Samy. I am learning how to

manage my money carefully.
Samy: Well, that’s good. Actually I’m doing

a research on business transaction.
Aryaan: I can lend you a book. You will acquaint

yourself with the characteristics and different
examples on business transactions.
Samy: Thank you for your help, Aryaan.
Key characteristics of business transactions
A business transaction must have the following characteristics.

• It must have a monetary value.
• It must be supported by a source document (invoice, receipt, etc).
• Each business transaction involves an infl w and outfl w.
Examples of business transactions

(a) Sale of goods for Rs 8000, cash
Selling goods
Goods OUT of the business
Business Consumers
Money IN the business
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(b) Purchase of goods for Rs 5000, cash
Paying Rs 5000 to buy goods
Money OUT of the business
Business Suppliers
Goods IN the business
(c) Bought motor van to be used in the business Rs 8000, cash
Paying Rs 8000 to buy motor van

Business Motor van Dealer
Motor van IN the business
(d) Paid business expenses for Rs 2000, cash
Paying Rs 2000 for expenses

Business Pay wages
Labour service IN the business
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Business Transactions
Cash Credit Bank

Cash transaction is Credit transaction refers
to a transaction whereby Bank transaction refers to
a transaction where
someone buys goods and all receipts and payments
payment is settled
services, which are paid at a made through the bank.
immediately in cash.
later date.
Figure 1: Business Transactions
10.2 Cash and Bank Transactions

Business transactions are settled either in cash or through the bank by issuing cheques. It is
important to have a proper accounting of cash and bank transactions. All cash and bank
transactions are recorded in separate books, in order to have a systematic and permanent
record. This enables a clear record of the cash and bank balance of an enterprise.
A conversation between Sheela and the bookkeeper.
Hello Ritesh! Can you tell me how much money do we

have as cash and as bank balances ? and also, how do
you keep track of the transactions ?
Yes Ma’am! The cash balance is Rs 10,000 and bank balance is

Rs 25,000. I keep seperate books for cash and bank transactions.
All cash receipts and payments are posted in the Cash
account and all transactions through the bank, like cheque
payments, deposits in the Bank account.
I can give the cash and bank balances on a daily basis as
they are kept in chronological order.
Some common examples of cash and bank transactions
Cash and Bank Transactions
Cash Transactions Bank Transactions

• Cash from sales • Cash deposits
• Cash from customers • Expenses paid by cheque
• Cash payments for expenses • Payment to suppliers by cheque
• Cash purchases • Purchases of goods and paid by cheque
• Cash paid to suppliers
Figure 2: Cash and Bank Transactions

110
110
10.2.1 Cash Transactions
Cash transactions refer to cash receipts and payments. A cash transaction uses money (notes
and coins) to pay for the goods and services. For the day to day running of the business there
should be cash infl ws and cash outfl ws.
The table below shows the different forms of cash receipts and cash payments in a business.
Cash Receipts Cash Payments Cash invested by the proprietor is

Cash sales of goods Cash purchase of goods called capital.
Sale of old assets Cash paid to suppliers Cash receipts = cash inflows
Cash payments = cash outflows
Cash invested by Proprietor Cash paid for expenses like
(Capital) wages and rent
Cash withdrawn by
Proprietor
Table 1: Cash Receipts and Cash Payments
Cash Receipts (Cash infl ws)

When a business sells goods on cash, it receives revenue from the sale (Cash comes IN).
Cash receipts are income to business and they increase the cash balance.
Cash Payments (Cash outfl ws)

When a business pays cash for its goods purchased or its expenses, they are called Cash Payments
(Cash goes OUT).
• Cash payments are expenditures to a business.
• Cash payments decrease the amount of cash in hand.
Recording of cash transactions

Worked example
Transactions Rs
Mahika started business with capital into cash 30,000
Bought goods for cash 13,000
Cash paid for transport 800
Cash sales 15,500
Cash paid for advertising cost 2,500
Cash paid for general expenses 2,000
Bought equipment and paid cash 9,000
Paid cash for wages 7,500
Paid cash for rent 6,000
111
Recording of cash transactions Payments (Rs) Receipts (Rs)

Capital 30,000
Add cash sales 15,500
Total cash Receipts 45,500
Less cash payment:
Purchase 13,000
Transport 800
Advertising 2,500
General expenses 2,000
Equipment 9,000
Wages 7,500
Rent 6,000
Total cash payments (40,800)

Cash at the end of a given period
4,700
(Receipts - Payments)
Activity 1
(a) Sale of goods on cash is treated as cash receipt.
(b) When expenses are paid by cash, they are called cash outfl ws.
(c) Cash payment increase the cash balance of a business.
(d) Cash received from customers increase the cash balance of a business.
(e) An example of cash inflow is cash purchase of goods.
(f ) Cash withdrawn by the proprietor is called capital invested into the

business.
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112
Activity 2
From the given data, record the cash transactions in a proper way and calculate the cash
balance at the end. Pierre Louis started a business and the following transactions took place.
Transactions Rs
Pierre Louis started business with capital into cash 45,000
Cash purchases 16,000
Cash paid for advertising 1,800
Sold goods for cash 19,500
Paid for heat and power 3,500
Cash paid for stationery 1,000
Bought equipment and paid cash 12,000
Pierre Louis paid wages to employees 8,500
Cash paid for rent 5,000
Cash sales 15,500
Bought goods on cash 12,000
Paid cash for general expenses 3,500
Recording of cash transactions Payments (Rs) Receipts (Rs)

Capital
Add cash sales
Total cash receipts
Less cash payments
113
10.2.2 Bank Transactions

Bank transactions refer to all receipts and payments made through the bank. An enterprise
uses bank account to settle all receipts and payments. A business accepts cheques as receipt
from customers and also issues cheques for the payment. A business can deposit its cash
balances, pay its suppliers, withdraw money, issue cheques to pay a number of expenses and
can use other facilities offered by commercial banks.
Recording of bank transactions. Worked example.
Reshma started business and the following transactions took place through the bank.
Transactions Rs
Reshma started business with capital into bank 15,000
Bought goods for resale by cheque 7,000
Paid for transport by cheque 500

Cash sales and the takings were banked 8,500
Paid advertising cost by cheque 1,500
Paid insurance for the year by cheque 2,000
Bought machine by cheque 5,000
Paid wages by cheque 2,500
Recording of bank transactions Payments (Rs) Receipts (Rs)

Capital 15,000
Add sales 8,500
Total receipts at bank 23,500
Less payment by cheque:
Purchases 7,000
Advertising 1,500
Transport 500
Insurance 2,000
Machine 5,000
Wages 2,500
Total payment by cheques (18,500)
Bank balance at the end of a given period
5,000
(Total receipt at bank - Total payment by cheque)
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114
Activity 3
From the given data, record the bank transactions in a proper way and calculate the
bank balance at end. Charles started business and the following transactions took
place.
Transactions Rs
Charles started business with capital into bank. 25,000
Bought goods for resale and paid by cheque 7,000
Paid for advertising by cheque 500
Total sales deposited into bank 16,000
Paid general expenses by cheque 2,500
Paid electricity bill by cheque. 2,000
Bought motor vehicles by cheque 8,000
Paid rent by cheque 2,500
Recording of Bank transactions Payments (Rs) Receipts (Rs)

Capital
Add sales
Total receipt at bank
Less payments by cheques:
115
Activity 4
Tick: (√) the appropriate column.
Transactions Bank Cash
1 Paula deposited a cheque into her bank account
2 Cash sales and deposited into bank
3 Cash purchases
4 Received a bank loan
5 Paid Ah Wong by cheque
6 Paid advertising by cash
7 Paid wages by cheque
8 Proprietor withdrew cash from business bank account
116
116
Match each term in column 1 with the correct definition in olumn 2. Write your
answers in the table which follows. The first one has een done for you.
Column 1: Terms Column 2: Definition
refers to any activity that can be measured in

1 Business transaction A monetary value and which affects the financial
position of an enterprise
is a written order directing a bank to pay a
2 Cash transaction B
specified sum of money o the named person
a sum of money borrowed by a business from a
3 Capital C
bank on certain terms and conditions
is obtained by subtracting total cash receipts
4 Cash infl ws D
from total cash payments
is the amount of money that an entrepreneur
5 Cash outfl ws E
invests in his business
occurs when the business deposits money into
6 Bank balance F bank which have been collected as cash sales or
cash received from customers
are cash paid out by a business for purchases
7 Cheque G
and expenses
8 Cash deposit H are cash receipts of an enterprise
refers to the amount of money kept at bank at a
9 Bank loan I
given at time period
10 Bank transactions J refers to cash receipts and cash payments
refer to all receipts and payments made through
11 Cash in hand K
the bank
Term 1 2 3 4 5 6 7 8 9 10 11
Definitio A
117
2. State two characteristics of a business transaction.

Characteristic 1 ____________________________________________________________
Characteristic 2 ____________________________________________________________
3. Give two reasons of keeping cash and bank transactions in a proper way.
Reason 1 _________________________________________________________________
Reason 2 _________________________________________________________________
4. State one difference between cash infl w and cash outfl w of a business.
Give an example of each.
Difference __________________________________________________________________
_____________________________________________________________________________
Example of a cash infl w ________________________________________________________
Example of a cash outfl w _______________________________________________________
KEY TERMS
Bank transaction refers to all receipts and payments made through the bank.
Business transactions are activities that affect the financial position or ope ations
of an enterprise.
Cash transactions is a transaction where payment is settled immediately on cash.
Credit transaction refers to a transaction whereby someone buys goods and

services, which are paid at a later date.
118
118

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7

BUSINESS AND ENTREPRENEURSHIP EDUCATION (BEE) PANEL

Roodradeo Beefun - Coordinator, Senior Lecturer, MIE

© Mauritius Institute of Education (2021)

Unit 2: Goods and Services 13

Unit 3: Factors of Production 27

Unit 5: Economic Systems 54

Unit 7: Enterprising spirit 79

Unit 8: Income and Expenses 87

Unit 9: Accounts for Enterprise 95

Unit 10: Cash and Bank Transactions 107

• identify the basic needs and wants of an individual

1.1 Basic needs

What do I need to survive?

Three Basic Needs

Food Clothing Shelter

Rice & bread Water

Figure 2: Examples of food

Figure 4: Examples of shelter

Fill in the blanks with the appropriate words given below.

clothing cannot shelter food

Classify the following items in terms of food, clothing and shelter.

Items Food Clothing Shelter

I may have all the basic needs to survive but I wish to

Mobile phone Designer T-shirt Luxurious House

After satisfying their basic needs, people desire

Wants are those goods and services which

Wants are unlimited.

Key Wants vary according to individuals’ tastes and

Wants grow over time.

Figure 6: Key characteristics of wants

Fill in the blanks with the appropriate words given below.

(a) Explain the difference between needs and wants.

(b) Classify the following items into needs or wants.

Items Needs Wants

1.3 Entrepreneurs satisfying human needs and wants

An entrepreneur is someone who organises and manages

Goods & Services

Figure 7: Entrepreneurs satisfying human needs and wants

The enterprise has always involved the local community,

(b) List the projects in which Mr Sarjua’s enterprise is specialised.

(c) Marie-Claude Donze specialises in the production of _________________ . (honey / limon)

(d) List the products proposed by Miel Victoria.

1.4 Basic economic problem

Do you think you can satisfy all your wants?

Are your wants limited?

Since resources are scarce, people cannot satisfy

Figure 8: Limited resources versus unlimited wants

Opportunity cost is the sacrifice which

Phone card Burger

Complete the table below.

Items Choice Opportunity cost

Gym or School School

Hospital or Swimming Pool Swimming pool

T-shirt or iPad iPad

Bread or Rice Bread

Fruits or Fries Fries

State whether the following statements are True or False.

1. Natacha lacks money to buy herself a new pencil

2. People can survive without their needs.

3. An enterprise produces aluminium openings

4. Your friends can buy everything they want

End of Unit Activity

Goods: (1)___ (2) _

Services: (1) _ (2)

(i) (i) _

(ii) (ii) _

(i) ______ (i) _

(ii) ______ (ii) _