Lesson Notes By Weeks and Term v5 - Grade 7
The economy: needs, wants, goods and services (Grade 7) – Week 3 focus
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The economy: needs, wants, goods and services (Grade 7) – Week 3 focus
Download the Lessonotes Mobile South Africa app for faster lesson access on Android and iPhone.
Subject: Economic and Management Sciences
Class: Grade 7
Term: 1st Term
Week: 3
Theme: General lesson support
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This week, we delve into the fundamental building blocks of any economy, including our own South African economy: needs, wants, goods, and services. Understanding these concepts is crucial because they explain why people work, why businesses exist, and how resources are allocated within our society. In South Africa, understanding these concepts can help us better understand issues like poverty, unemployment, and the provision of essential services to all citizens. It allows us to critically analyze how our economic system functions and how we can all contribute to a more equitable and prosperous future.
2.1 Needs vs.
Wants Needs: These are things that are essential for survival. If you don't have them, your life or health is at risk. Think of them as the absolute basics required to live a healthy and productive life. Examples include food, water, shelter, and basic clothing. South African
Example: Clean drinking water is a need. Access to safe and clean water is crucial in many parts of South Africa, especially in rural areas.
Wants: These are things that we desire but are not essential for survival. They improve our quality of life and provide comfort and enjoyment, but we can live without them. Examples include the latest cell phone, designer clothing, a fancy car, or going to a restaurant. South African
Example: A brand new, expensive pair of sneakers is a want. While shoes are a need, a specific brand or style goes beyond basic protection and becomes a desire.
Key Difference: Needs are essential, while wants are desirable.
Activity: Think about your last trip to the shop. List three things you bought that were needs and three things that were wants. Discuss your choices with a classmate. 2.2 Goods vs.
Services Goods: These are tangible items that we can touch, see, and use. They are physical objects that satisfy our needs and wants. South African
Example: A loaf of bread from a local bakery is a good. You can hold it, eat it, and it satisfies your hunger (a need). Another example is a school uniform, fulfilling the need for appropriate attire for education.
Services: These are intangible actions or activities performed by someone for another person or organization. You can't physically hold a service, but you benefit from it. South African
Example: Getting a haircut at a salon is a service. The barber or hairdresser provides the service of cutting and styling your hair. Another example is healthcare provided by a doctor or nurse. The action of providing medical care is the service.
Key Difference: Goods are tangible, while services are intangible. Goods can be physically possessed and used, while services are actions performed.
Activity: Consider the activities that happen at your school. Identify three examples of goods (e.g., textbooks, desks) and three examples of services (e.g., teaching, cleaning the school). 2.3 Scarcity Scarcity is the fundamental economic problem that arises because our needs and wants are unlimited, but the resources available to satisfy them are limited. This means we can't have everything we want, and we must make choices about how to use our limited resources.
Example: Imagine you only have R
5
0. You need to buy bread, milk, and maize meal for your family. You want to buy a chocolate bar. Because of scarcity (your limited money), you need to choose between satisfying your needs (food) and satisfying your want (chocolate). You will likely choose the needs first.
South African Context: Scarcity is a significant issue in South Africa. Many people lack access to basic necessities like food, water, and housing. This is because the resources available are not enough to meet everyone's needs and wants. 2.4 Businesses Providing Goods and Services Businesses play a crucial role in an economy. They organize the production and distribution of goods and services to satisfy the needs and wants of consumers. Businesses use factors of production (land, labor, capital, and entrepreneurship) to create these goods and services.
Example: A local spaza shop buys groceries from wholesalers, stocks them on shelves, and sells them to the community. This business is satisfying the need for food and other household items.
Profit: Businesses aim to make a profit, which is the difference between the revenue they earn from selling goods and services and the cost of producing them. Profit motivates businesses to operate efficiently and innovate to meet consumer demand. 2.5 Private vs. Public Goods and Services Private Goods and Services: These are goods and services that are excludable (meaning people can be prevented from using them if they don't pay) and rivalrous (meaning one person's consumption of the good or service prevents another person from consuming it). South African
Example: A privately owned taxi service. You have to pay to use the taxi (excludable), and only one person/group can use that specific taxi at a time (rivalrous). Another example is a loaf of bread purchased from a supermarket.
Public Goods and Services: These are goods and services that are non-excludable (meaning people cannot be prevented from using them, even if they don't pay) and non-rivalrous (meaning one person's consumption of the good or service does not prevent another person from consuming it). Public goods are often provided by the government. South African
Example: Street lighting. Everyone benefits from streetlights, whether they pay for them directly or not (non-excludable), and one person's use of the streetlight doesn't prevent another person from using it (non-rivalrous). Another example is national defence.