Lesson Notes By Weeks and Term v5 - Grade 7

Lesson Video

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Performance objectives

• Define and differentiate between needs and wants.
• Explain and create a simple personal budget.
• Identify the four factors of production.
• Describe different types of businesses.
• Explain the importance of entrepreneurship in South Africa.

Lesson summary

This week focuses on revising and consolidating key concepts covered in Economic and Management Sciences (EMS) throughout Grade

7. We'll be reinforcing our understanding of how the economy works, how businesses operate, and how we, as individuals, can make responsible financial decisions. This is important because understanding these concepts equips us to become informed citizens, entrepreneurs, and consumers who can contribute to a thriving South African economy. Knowing about budgeting, for instance, can help you manage your pocket money wisely, plan for a future purchase, or even start a small business.

Lesson notes

2.1 Needs vs.

Wants: Needs: Needs are essential for survival. These are things we absolutely require to live a healthy and fulfilling life. Examples include food, water, shelter, and clothing. In South Africa, access to clean water and affordable housing are crucial needs, particularly in rural communities. Think about a family in a rural area who rely on a borehole for water – that borehole represents a critical need being met.

Wants: Wants are things we desire but are not essential for survival. They enhance our quality of life but we can live without them. Examples include the latest smartphone, designer clothes, or a holiday. Consider wanting a specific brand of sneakers instead of a more affordable, functional pair. The affordable pair meets the need, while the branded pair is a want.

Example: Imagine you have R

1

0

0. You are hungry (a need). You can buy bread and some canned pilchards to make a sandwich.

However, you want a cool drink and a packet of chips. Buying the bread and pilchards addresses your need. Buying the cool drink and chips satisfies a want. 2.2 Budgeting: A budget is a plan for how you will spend your money over a specific period (e.g., a week, a month). It helps you track your income (money coming in) and expenses (money going out), ensuring you don't spend more than you earn.

Steps to create a budget: Calculate your income: How much money do you receive? This could be pocket money, earnings from a part-time job, or allowance from family.

Identify your expenses: List everything you spend money on. Divide these into fixed expenses (costs that stay the same, like transport) and variable expenses (costs that change, like entertainment).

Calculate total expenses: Add up all your expenses.

Compare income and expenses: If your income is more than your expenses, you have a surplus (savings!). If your expenses are more than your income, you have a deficit (you're spending too much!).

Adjust your budget: If you have a deficit, look for ways to reduce your expenses. Can you pack a lunch instead of buying food? Can you walk instead of taking a taxi sometimes?

Example: Let's say Thando gets R200 pocket money per month.

Her expenses are: R50 for airtime, R80 for snacks, and R30 for transport.

Income: R200 Expenses: R50 + R80 + R30 = R160 Surplus: R200 - R160 = R

4

0. Thando has R40 left over that she can save or use for something else. 2.3 Factors of Production: These are the resources used to produce goods and services.

There are four main factors of production: Land: Natural resources used in production. This includes everything from fertile soil for farming to minerals like gold and diamonds. In South Africa, land is a particularly sensitive topic due to historical inequalities in land ownership. Examples are agricultural land used for growing maize, and mines producing coal.

Labour: The human effort (physical and mental) used in production. This includes the skills, knowledge, and effort of workers. South Africa faces challenges with unemployment, highlighting the need for skills development and job creation. Examples include farm workers harvesting crops, and teachers educating students.

Capital: Man-made resources used to produce other goods and services. This includes machinery, tools, equipment, and buildings. Think of tractors on a farm, computers in an office, or ovens in a bakery.

Entrepreneurship: The ability to combine the other factors of production to create goods and services and take risks. Entrepreneurs are innovators and risk-takers who start businesses. People like Patrice Motsepe, who built a mining empire, are famous examples of entrepreneurs in South Africa. 2.4 Types of Businesses: Sole Proprietorship: A business owned and run by one person. The owner is responsible for all profits and losses. Many informal businesses in South Africa, like spaza shops, are sole proprietorships.

Partnership: A business owned and run by two or more people who share profits and losses according to an agreement.

Company: A business that is separate from its owners (shareholders). Companies can raise capital by selling shares. Examples include large corporations like Shoprite or MTN. 2.5 Entrepreneurship: Entrepreneurship is the process of starting, organizing, and managing a business venture, assuming the risks involved to make a profit. Entrepreneurs play a vital role in the South African economy by creating jobs, developing new products and services, and contributing to economic growth. Think about the street vendors selling fruit or snacks. They are taking the initiative to create their own income and contribute to the economy, however small. They provide affordable goods, and jobs for themselves and those they employ. Guided Practice (With Solutions)

Question 1: Identify whether the following items are needs or wants: A. A warm coat in winter B. The latest gaming console

C. Three meals a day

D. A smartphone with unlimited data

E. Textbooks for school Solution: A.