UNIT 2: INDIVIDUAL & ECONOMY: Flashcards
Human needs divided into following groups:
NATURAL NEEDS (light, air, water)
• ESSENTIAL NEEDS ( food, clothes, housing, recreation)
• CONVENTIONAL , ESSENTIAL NEEDS ( cellphones)
• LUXURY NEEDS (cars, radio)
• CULTURAL NEEDS ( education, music)
• COLLECTIVE NEEDS ( maintenance of law & order, education)
SALES AGREEMENT / SALES CONTRACT:
goods bought / sold, buyer +seller reach an agreement
MUST AGREE ON FOLLOWING:
• ARTICLE BOUGHT ( clear about item which is bought)
• PRICE TO BE PAID ( agree about price that has to be paid. In sum of money(rands & cents)
• TRANSPORT / FREIGHT RATE (agree whether / not freight rate should be included in price)
- local price (doenst include transport costs. buyer pays transport costs)
- free on rail (FOR): seller pays transport costs to sellers station
- Rail charges paid: price included rail charges, which seller pays
***Capital
NB
includes all the articles that have been manufactured and used in producing goods and services
-Need money to produce or buy equipment
***Natural Resources
NB
water, gold and diamonds (Comes from nature)
- Can also be scare or limited
- Grow wheat the farmer needs good agricultural soil
HOW ESSENTIAL NATURAL RESOURCES / RAW MATERIALS ARE:
grow wheat, farmer needs good agricultural soil
produce furniture, need to be trees
coal only be mined if present in ground
leather shoes only be manufactured if animal hides area available
ENTREPRENEURSHIPS
mans ability to coordinate the other 3 production factors (raw materials, labour, capital) to deliver products.
Must: see raw materials are available, every worker knows exactly what to do, necessary capital (money +machinery) is provided.
Profit
compensation someone entitled to when he delivers service (item sold @ higher price than bought for)
Types of retailers
) GENERAL DEALER:
- found I every town / suburb (order large variety-goods from wholesalers & sell them to consumers)
- services offer: stock many kinds of goods (variety of choice)
2) SELF-SERVICE SHOP: - supermarket
- services offer: large variety of goods, can move around freely, buy in bulk, prices lower
3) SPECIALITY SHOP: - sell one kind of article
- services offer: retailers know products well & can offer advice, prices not too high
PERSONAL PRODUCTIVITY + ACHIEVING EFFICIENCY:
-efficiency: complete task with min wastage time, materials +money
ACHIEVE EFFICIENCY:
• set goals (work hard at achieving goals daily)
• evaluate how spend available time ( can establish how productive you are by keeping record of activities for a week)
• work more efficiently ( confine attention to relevant matters)
• learn to say no (say no, to avoid extra tasks)
• strive towards quality +quantity (get a lot of work done, correctly)
Money
economy cant function without money & is means that satisfies human needs +means of payment.
-used in daily buying +selling, trade
Not only means of payment but also:
• measure of worth (value of item determined in rands +cents)
• bearer of worth (forms of coins +notes represent value)
• standard of postponed payment ( when something gbough ton credit, the debt shown as an amount of money +paid in money. Therefore money = standard in which future payments are expressed)
***Bank overdraft
NB
– not a loan
- The bank grants you an overdraft or permission to write out cheques up to a certain amount
- Bank advances you the money
- Improve or supplement your cash-flow over a shorter period
- Required money must be paid pack for the negative amount to disappear
***Investment
NB
Popular form of investment is in businesses
- People invest money in businesses and in return get shares inside the business
- Direct investment on securities exchange requires large amount of money
Credit
- buy something without paying full price at once.
- pay off certain amount over period of time
- regular payments increase financial reputation
