Pakistan

International School
Aziziyah, Jeddah
Cambridge
Curriculum Section
(CCS)

Cambridge IGCSE and O Levels Business

Studies Course PPT Week 1
Course Code: 0450
Unit 1. Understanding business activity
Teacher: Mariam Hadi Ali
Why Study Business Studies?

The Cambridge IGCSE Business Studies syllabus develops

learners' understanding of business activity in the public and
private sectors, and the importance of innovation and
change.

Learners find out how the major types of business

organization are established, financed and run, and how their
activities are regulated. Factors influencing business decision-
making are also considered, as are the essential values of
cooperation and interdependence.

Learners not only study business concepts and techniques

but also enhance related skills such as numeracy and enquiry.
The syllabus provides both a foundation for further study at
Cambridge International A Level and an ideal preparation for
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the world of work.
 BUSINESS STUDIES
COURSE

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 Components of
Assessment

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 Syllabus 1st Term &
Pacing
week Units Covered week Units covered
1 unit 1 14 Exam style Questions Sec
2
2 unit 2
3 unit 1 & 2 Past papers 15 Past Paper Practice
Unit 3 16 Past Paper Practice
4 unit 3 17
5 Unit 4 18
6 unit 4 & unit 5 19
7 Unit 5 20
8 Unit 6 21
9 unit 6 & unit 7
10 Unit 7
11 Unit 8
12 Unit 8 & Unit 9
13 Unit 9 5
Exam Pattern
Tips for Business IGCSE Exam
Discussion : 20 minutes
Learner’s Guide:
Understanding how marking is distributed
Exam pattern
Allocation of exam marking
Learner’s Guide Syllabus Break
Down:

Mind Maps Chapter 1: Edu page 6

+■Key
Added value – the difference between the selling
price of a product and the cost of raw materials used
terms to make it

■ Effective demand – demand for a product that is

backed up by the ability and willingness to pay for it

■ Factors of production – the four categories of

resources that are used to produce goods and services:
land, labour, capital, enterprise

■ Goods- tangible products that can be touched and

consumed

■ Needs – things necessary to sustain life

■ Opportunity cost – the cost of something in terms of

the next best thing

■ Private sector – the sector of business consisting of 7

■ Profit – the profit a business makes is the amount by
which tis income from selling the goods and services it
produces exceeds the costs of producing those goods
and services

■ Public sector – the sector of business

consisting of businesses owned by the state

■ Resources – items of limited availability that can be

used n
i human activity

■ Services – things other people or businesses do for

you

■ Wants – things chosen to satisfy a need or to make

life more enjoyable

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+
Learning outcomes
Lesson 1:
Chapter 1: 1.1: Business
Develop an understanding of needs, wants and scarcity
Activity
■

■ Understand the purpose of business activity

■ Develop knowledge of the objectives of non-profit making

activity, private enterprise and public enterprise

■ Appreciate the concept of adding value

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Definition of ‘scarcity’

■ The basic economic problem that

arises because people have unlimited
wants but resources are limited.
Because of scarcity, various
economic decisions must be made to
allocate resources efficiently

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+
What is enterprise?

■ The term “enterprise” has two common meanings.

■ Firstly, an enterprise is simply another name for a business.

You will often come across the use of the word when reading
about start-ups and other businesses…“Simon Cowell’s
enterprise” or “Michelle set up her successful enterprise after
leaving teaching”.

■ Secondly, and perhaps more importantly, the word

enterprise describes the actions of someone who shows
some initiative by taking a risk by setting up, investing
in and running a business.

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+
Business Activity

■ Businesses produce goods and services. These

are the products of the business.

■ Which are goods and which are services?

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+
Business Activity

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+
Business Activity

■ Goods are things you can touch

■ Services are things that other people do for

you

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+
Needs and wants

■ What we need and what we want can sometimes be

confusing.

■ Often you say you need a new iPod/mobile device

when in fact you want it rather than need it.

■ Which items do you think people need and which

items do you think people want?

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+
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 it’s 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 petrol or other oil products customers want.

■ Individually answer the following questions:

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?

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+
Business in context
1. KPC produces oil products such as petrol and diesel.

2. KPC produces goods (products).

3. KPC’s product can be purchased at garages and gas or

petrol stations.

4. KPC’s product is made from raw or crude oil.

5. Student’s own answer. Points to consider could include:

■ KPC has the necessary raw materials in its

country.
■ KPC has developed the skills to extract and produce
petrol and diesel. This means it could seek new locations
to find oil.
■ There is a market for the
product.
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+
1.1 Activity
■ Think carefully about the following products and answer the
questions.

(a)A loaf of bread (b) An oak coffee table (c) a book

1. What are the raw materials that each product is made of?

2. Where do these raw materials come from?

3. If society keeps using these raw materials, will they run out?
Explain your answer.

■ Definition ‘raw materials’

■ A material or substance used in the primary

production or manufacturing of a good.

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+
1.1 Answers

1. Bread is made from flour; an oak coffee table is

made of wood; the book is made of paper.

2. Flour is made from wheat that is grown on farms;

wood comes from trees that grow on the land; paper
is made from wood and other fibres.

3. Wheat and trees are both renewable. This means that

as they are used to make products, new wheat and
trees can be grown. However, while a new crop of
wheat can be grown every year, it takes many years
for trees to grow. If these resources are used to make
products faster than they can be replaced, supplies will
run out.
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+
Demand and effective
demand
■ Our wants influence the way we satisfy our needs. For
instance, if you need food which would you choose to
satisfy your need?

■ You may choose to satisfy your need by eating a

burger because that is what you want.

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+
Demand and effective
demand
■ When you want something, you create a demand for
it.

■ You have decided that you want the new iPhone 4S.
What do you require to satisfy your want?

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+
Demand and effective
demand
■ To satisfy your want you will need money to pay for it
as well as the willingness to spend the money on it.
You may wish to spend the money on something else

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Demand and effective
demand
■ Your demand for an iPhone 4s will not be
successful unless other people want the same
phone too and have the money and are willing to
pay for it.

■ Apple would not make these products if you are

the only person who wants them. The same
response applies to businesses.

■ This is called effective demand. People create

effective demand when enough people want
something and are able to and willing to pay for it.

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+
Needs and wants

Need
s

Clothing Shelte Food

r

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+
Needs and wants

Wants
ts

Shelte Food
Clothin r
g

Shoes Hous Burge

e r

Party Apartmen pizz

Dress t a

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+
Activity 1.2

1. What is the main difference between needs and

wants?

2. Make two lists: the first showing the things that you
need; the second listing things that you want.

3. Identify 3 kinds of businesses or organisations that

supply each item on your lists.

4. Select two businesses that you have identified and

explain why you think that they supply the item.

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+
Activity 1.2 answers

1. Needs are items that we must have in order to live, whereas

wants are items that we would like to have but which are
not essential for us to live.

2. Student’s own answer. Needs include items such as food,

water, shelter and clothing. Wants might include a
certain style of clothing, a holiday, a mobile phone and so
on.

3. Student’s own answer based on items identified in

question 2.

4. Students own answer based on businesses identified in

■ question 3. Reasons why the business supplies an item
could be:
■
it wants to provide a service

it has spotted a market for the product to make money.

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+
Business activity and the
factors of production
■ Business activity involves the use of resources
known as factors of production. These are:

■ Land

■ Labour

■ Capital

■ Enterprise

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+
Factors of production: land

■ Land includes all resources that occur

naturally.

■ Can you think of any?

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+
Factors of production: labour
■ Labour is the effort of work provided by people.

■ Labour-intensive production can often be found in

many developing countries. Labour-intensive
production means labour is plentiful and relatively
cheap compared with the technology available to do
the job.

■ In more industrialised countries such as the UK

labour- intensive production can be more
expensive in terms of wages than the cost of
running machinery.

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+
Factors of production: capital

■ Capital includes items used in the production of goods and

services made by people. These include:

■ Buildings

■ Machinery

■ Equipment

■ Finance required to purchase these items

■ Production that uses a high proportion of capital compared to

labour is called capital-intensive. Capital-intensive
production can be seen as a cheaper and more efficient
production using the latest technology than by hand (labour-
intensive)

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+
Factors of production:
enterprise
Enterprise is the ability, skill and enthusiasm to take risks
■
involved in developing a business idea and gathering
appropriate resources.

■ All businesses combine factors of production to produce

goods and services that people want to buy.

■ A large company like Kuwait Petroleum Corporation will use

all four elements to produce the final product (petrol or
diesel).

1. Land- oil wells and refineries

2. Labour- staff

3. Capital- drilling equipment, pipelines, office buildings

4. Enterprise- the skill of senior management

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+
Village
fisherman
■ Land
:

■ Labour
:

■ Capital
:
■ Enterprise
:

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 Factors ofFactors
Production
of production

Land Labor Capital Enterprise

Activity 1.1: Class Discussion

Activity 1.2: Group Discussion
1: Calculate supply…….
2: If 100 people in the country………..

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Lesson 1 Review

Complete Matching and Cross Word

activity

Word search quiz how well do you know

key terms?

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Any questions?

Thank you

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