Introduction to Economics, Consumers and Business and Markets Section 1-­‐ Introduction to Economics Outline what is meant by the economic problem and examine how different income groups would be affected by the economic problem. The economic problem is how are we to satisfy our unlimited wants with scarce resources. Because this desire of goods and services is greater than our ability to produce we must make choices and separate wants from needs. Every income group needs to decide how much of their income will be saved and how much will be spent, what goods and services they will purchase and the types of goods and services they purchase. People on a higher income are able to save a greater percentage of their income, and the higher someone’s income level is the more goods and services they can buy. This can affect their choice to purchase more expensive better quality goods than lower income groups who may need to choose the cheaper option and minimize the number they purchase. The amount that people are able to save greatly affects their future plans people who have a higher income can save more for their plans for the future such as whether to have children and how many to have, when to buy or build a house, which school their children will attend and whether they can attend university. Ones occupation and/or education level usually relates to the level of income they receive. More skilled jobs usually come with a higher income and require a higher level of education.

Section 2-­‐ Consumers and Business Outline the Different types of industries and analyse the impact of investment and technological change on a firm. There are five different types of industry. The first is Primary industry, which are all firms that extract natural resources. These resources then go to secondary industry, which use these resources to manufacture goods, including capital goods such as computers and machinery used in production processes and consumer goods for example cars and furniture. Next is the tertiary industry that consists of firms that provides services to consumers such as public transport and postal services. The generating and sharing of information such as education and financial planning are called the quaternary industry and lastly all firms involved in providing services usually performed in the home are under the quinary industry.