Introduction To

Business Activity
Unit 1
By The End Of This Unit You Must Know
• What is needs, wants, and scarcity
• The difference between needs, wants, and scarcity
• The purpose of business activity
• the objectives of non-profit making activity, private enterprise and public
enterprise
• The concept of adding value
 Goods And Services

• Services
• Goods
Services are things that
Goods are things you can touch
other people do for you,
and use, such as clothes and
such as cutting your hair
books
or selling you goods in a
shop.
 Needs And Wants

Needs are items that we Influence Wants are items that we

must have in order to would like to have, although
live we won’t die without them.
Example: Food, Drink Example:
and Shelter a computer
a holiday
a car
 Business In Context:
• Kuwait Petroleum Corporation (KPC) is one of the world’s largest oil companies.
The company makes products such as petrol and diesel from crude oil. Crude oil is
oil in its raw or natural state. It occurs naturally in deposits within the earth. To
produce the petrol that people buy from garages, KPC must first extract the crude oil
from the earth. The company does this by drilling oil wells, many of which are under
the sea. KPC then transports the crude oil to oil refineries where it is turned into the
petrol or other oil products that customers want. 1) What does KPC produce? 2)
Does KPC produce goods or services? 3) Where can you buy KPC’s product?
4) What is KPC’s product made from? 5) Why do you think KPC produces
petrol and diesel?
 Demand And Effective Demand
To satisfy your want you
must have money and
you must be ready to pay
for it. Effective Demand
Demand when enough people want something and
When you want something, you create are able and willing to pay for it
a demand for it
 Activity
• What is the main difference between needs and wants?
• Make two lists: the first showing the things that you need; the second
listing things that you want.
• Identify three kinds of businesses or organizations that supply each item
on your lists.
• Select two businesses that you have identified and explain why you think
that they supply the item.
 Businesses and The Purpose of Business
Activity
2 Types Of
Businesses Public Sector Organization:
Businesses owned and run by
the government to provide
Private Sector Organization: services to public are public
Businesses owned and run by enterprises
private individuals. They are
private businesses, or private
enterprises, and are in the
private sector.
NGO: 3 Type of Enterprise:
Activity
 Activity Solutions
Type Organization Objective
Private Sector Shops To make profit
Public Sector Shaukat Khanum Hospital To provide services
Non- Profit Making JDC Not owned by government and
to main aim is to provide
services to people.
 Scarcity And Opportunity Cost
• Everything found on Earth is finite, or in limited supply known as
scarcity.

• If you chose one activity (for example, an investment) you are giving up
the opportunity to do a different option. 
 Business Activity and The Factors of
Production
• Land ( all resources that occur naturally)
• Labor (the effort or work provided by people)
Labor Intensive Production
Developing countries

• Capital (Items used in the production of goods and services)

• Capital Intensive
 Factors Of Production
Enterprise ( Experiences and knowledge of a person are enterprise) .
Activity
 Activity Solutions
Business Land Labor Capital Enterprise
A Furniture Trees Labor for making Machinery Skills of labors in
Maker wood from trees furniture making furniture
for making
furniture
A shop Land Labor required for Shop Essentials Skills required to
Required for building a shop build a shop.
opening a shop
 Added Value
• The difference between the selling price of a product and the cost of the
raw materials used to make it.