<1.1 BUSINESS ACTIVITY>

1.1.1 PURPOSE/NATURE OF BUSINESS ACTIVITY

--ECONOMIC CONCEPTS--

--'NEEDS'--

NEEDS generally refer to those items that you really can't survive without, such as WATER, CLOTHING, SHELTER, and FOOD...
Items in this category are often considered 'BASIC HUMAN RIGHTS'.

--'WANTS'--

WANTS on the other hand not only cover needs but also every other desirable item, such as the NEW I-PHONE, a NEW TESLA etc...

--'UNLIMITED WANTS'--

...However these wants are UNLIMITED...

--'LIMITED RESOURCES'--

Yet the PRODUCTIVE RESOURCES that the ECONOMY POSSESSES to produce these GOODS & SERVICES:
- - LAND: Natural resources
  - LABOUR: Human resources
  - CAPITAL: Machinery, tool, infrastructure etc...
  - ENTERPRISE: Human skill of combining the three factors to make output. See Unit 1.3
are LIMITED IN QUANTITY...

--'SCARCITY'--

When WANTS CAN NOT BE SATISFIED WITH THE AVAILABLE PRODUCTIVE RESOURCES we say that there is 'SCARCITY'.

--'CHOICES'--

...given that not all wants can be satisfied, 'CHOICES' inevitably need to be made about what products to produce and what products to forgo.

--'OPPORTUNITY COST'--

We can therefore say that the 'cost' of producing one good using a set amount of resources is in fact the opportunity/value/benefit of the next most valued use of those resources which is now forgone.
In economics we call this value forgone the 'OPPORTUNITY COST' of a decision.
For a simplistic example we can say that the opportunity cost of Mr. B's labour being used to supply TES's educational services, is the loss to the world of not being able to enjoy his skills as a pro footballer ;-)

--SPECIALISATION--

--DEFINITION--

SPECIALISATION occurs as a consequence of SCARCITY as the "desire to satisfy as many wants as possible using the least amount of productive resources", compels businesses, workers and countries to ‘SPECIALISE’ in producing the goods or services that they are best suited for (Most productive & least wasteful), and trading the surplus with producers of products that they are not best suited for.
- - COUNTRIES specialise in the production of the goods and services that their factor endowments are most suitable for. e.g. China specialises in the manufacture of labour-intensive products. and then trades their surplus for goods they don’t produce.
  - PEOPLE specialise in the production of the goods and services that they are most skilled at. e.g. Mr. Bounous, specialises in teaching business studies, then uses his income to exchange for goods & services he doesn’t produce.

--ADVANTAGES--

WORKERS MAKE BEST USE OF THEIR PARTICULAR TALENTS: The most suitable workers are chosen for the role, allowing for greater producivity, for example the tallest player is often chosen to be the goalkeeper.
WORKERS SKILLS WILL IMPROVE: Through repetitive practice ("Practice makes perfect") skills can be vastly improved and productivity will rise.
CAN LEAD TO LOWER PRICES: Higher productivity, means lower average costs which could result in lower prices for the consumer.

--DISADVANTAGES--

As the WORK IS MONOTONOUS AND REPETITIVE, WORKERS MAY BECOME BORED, which leads to LOWER PRODUCTIVITY.
As the worker's role only requires a NARROW RANGE OF SKILLS they will find it DIFFICULT TO FIND OTHER WORK.
The repetitive nature of the work can EASILY be AUTOMATED if it becomes cost effective.

--DIVISION OF LABOUR--

DIVISION OF LABOUR involves SPECIALISATION WITHIN A PRODUCTION PROCESS such as the process of making a SUBWAY sandwich, which often involves a worker 'taking orders', a worker 'cutting the bread', a worker 'filling the bread' and so on.

--TASK--

Heard of ChatGPT? of course you have. Know how to use it for learning rather than avoiding it?!!!!
Your first task is to either CREATE A POSTER or a SHORT VIDEO showing how a well-known company of your choice uses specialisation and the division of labour in their production process, and how it has both advantages and disadvantages.
For both options you will be using ChatGPT to generate the answer. Step one is to write ('Engineer') a PROMPT ('instructions') that explains exactly what you want. Below is an example that should be sufficint for our needs. I have set the question and added (Copy & Pasted) from the site above and then just tidied it up a bit.
"....Explain using examples specific to tasks at Mc Donalds the advantages of using division of labour to run its business more effectively in terms of how it allows WORKERS TO MAKE BEST USE OF THEIR PARTICULAR TALENTS: The most suitable workers are chosen for the role, allowing for greater producivity. As well as how WORKERS SKILLS WILL IMPROVE: Through repetitive practice ("Practice makes perfect") skills can be vastly improved and productivity will rise. and also how it CAN LEAD TO LOWER PRICES: Higher productivity, means lower average costs which could result in lower prices for the consumer. In addition also include the disadvantages in terms of how the WORK IS MONOTONOUS AND REPETITIVE, resulting in WORKERS BECOMING BORED, which leads to LOWER PRODUCTIVITY. As well as ho the worker's role only requires a NARROW RANGE OF SKILLS, meaning they will find it DIFFICULT TO FIND OTHER WORK, whilst the repetitive nature of the work can EASILY be AUTOMATED if it becomes cost effective. meaning the worker can EASILY BE REPLACED and become UNEMPLOYED...."

Now paste this into ChatGPT....

The results should look something like this...

Feel free to ask the AI to add more context to your ouput with follow up question. When you are happy with the ouput do one of these:
OPTION 1 POSTER: After generating the ChatGPT output, create a company themed poster that displays the text and includes quality and relevant images for each point made as well as logos and imagery from the chosen company.
OPTION 2 VIDEO: After generating the ChatGPT output, go to https://invideo.io/, or VEED.io, register and then go to 'Create AI video', and in the prompt box ask it to create a video based on the text (then copy and paste it in) and watch the magic happen.
In either case upload the final piece to your google site.

--PURPOSE OF BUSINESS--

--THE GENERAL PURPOSE--

From what we have read so far we can conclude that the purpose of all businesses is to "Combine the factors of production in order to produce goods and services that satisfy the unlimited wants of society"

--TASK--

With reference to the explanation above, write a paragraph expalining the purpose of TES.

--ADDED VALUE--

--DEFINITION--

In business, ADDED VALUE refers to the INCREASE IN THE VALUE that a company CREATES THROUGH ITS PRODUCTION PROCESS. It’s the difference between the cost of raw materials and the final selling price of a product or service.

--EXAMPLE: I-PHONE--

An iphone 6 is comprised of the following materials which alone have a monetary value of around $1. Of course we could all go out an buy these elements but do we have the sklll and resources to turn them into a communication device as complex as an iphone? Of course not.
As such a business such as Apple uses its knowledge, resources, marketing to add value to these raw materials and create a product that they can sell for a much higher price than the initial $1.
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