demanded will continue until a new equilibrium point is found at point ‘B’. At this point less oil is sold at a higher price.
Most retailers will run sales or special price discounts to attract customers and to try and sell off slow-selling items. Before being tempted by any sales items, always think about how much you are spending – not how much you are saving. Also, remember that just because something is on sale does not mean that it is worth buying.
A Use a bright colour to attract attention. I The simple message arouses interest. D The ad tries to create a desire by implying that drinking this sweet fizzy drink will bring you happiness.
as much money in shops as possible. They study how people prefer to walk around shops and what smells, decor and music work best in different types of shops. They advise retailers about where to position goods on shelves, which colour packaging works best, and how best to encourage impulse purchases.
P S1 B
P2 P1
A
A The action it wants you to take is to buy this product. Advertisement B. Clothing aimed at men
D ¶
Special pricing. 9.95 sounds far better than 10 (especially if the seller puts the 95 cent in smaller print). This common sales tactic often fools
Q2 Q1
Below-cost selling is when retailers sell a product at a lower price than they paid for it. This means that they are selling it at a loss. This technique is used to sell low value items in the hope that customers will buy other, more profitable, items at the same time. A loss leader is a product sold at below cost price with the intention of attracting customers into a shop.
Example 1: The Foleys’ house is worth 300,000 and is insured with ABC Insurance Corporation for 150,000. A fire causes 40,000 damage.
people into buying things that they would not buy for 10. Pair work Proportion insured is:
150,000 300,000
=
1 2
The ABC Insurance Corporation will only pay the Foleys ½ of the 40,000 claim, i.e. 20,000.
Example 2: A car worth 20,000 is in a traffic accident. However, it has only been insured for 10,000 (i.e. 50% of its value). The driver can only claim compensation worth 50% of the damage.
The price of petrol and diesel fl uctuates regularly due to changes in the demand and supply of oil. 1. Identify two reasons that could cause the market equilibrium price of petrol and diesel to rise if most of the oil imported into Ireland comes from countries in the Middle East.
Discussion (Group work) USINESS - UNIT
1.indd 47
A Uses bright sunshine and contrasting colours to attract attention. I The scenery and man walking away arouses your interest. D The handwritten message is targeted at men who like the outdoors and don’t like wearing suits.
2. Identify two reasons that could cause the market equilibrium price of petrol and diesel to fall if most of the oil imported into Ireland comes from countries in the Middle East.
Creating more competitive markets ¶ A The action it wants you to take is to buy this product. Unit 1 Personal Finance
¶ ¶ ¶
BUSINESS - UNIT
3.indd 361 ¶
5. How can an insurance company settle a claim? Literacy 7/02/20–
Weekly Payslip Lee Smith Pay Deductions
USC @ 2% PRSI @ 3%
Basic 760.00 PAYE Overtime 120.00
Example: A car worth 10,000 is insured with Insurance Company X for 10,000 and also with Insurance Company Y for 10,000. A road accident
Insurance companies will share the burden (principle of contribution). Where two or more companies have provided insurance, they will share the total cost of any claim between them. This is to prevent people making a profit by insuring the same risk with a number of companies and hoping to claim compensation from each insurance company separately.
causes 3,000 damage. Company X will pay 50% of the compensation Company Y will pay 50% of the compensation Total compensation
NESS - UNIT
1.indd 51
1. RTE Radio Radio 1 and RTE 2FM were once the only radio stations allowed to broadcast in Ireland. However, deregulation of the radio market has allowed new national and local stations to enter the market.
Research Gross Pay
880.00 Total Deductions
Choose an advertisement from a magazine and analyse it according to the AIDA principles by answering the following questions: (a) Who do you think it is targeted at? (b) How does it try to attract attention and interest? (c) What desire or want is it trying to stimulate? (d) What action is it trying to achieve? (e) In your opinion is the advertisement effective? Give reasons for your answer.
Private Pension Private Health Insurance
116.00 17.60 26.40 20.00 15.00
Net Pay 195.00 685.00
(a) Identify the different radio stations now competing for listeners in your local area. (b) Has deregulation been a good or a bad thing for radio listeners in your area? Give reasons for your answer.
Chapter Review
2. Bus Éireann used to be the only bus company allowed to operate bus services between Irish towns. Deregulation has encouraged new bus companies to enter the market. (a) Identify the different bus companies that provide services in your local area.
Key Terms Checklist Using a pencil, place a
C BUSINESS - UNIT
1.indd 115 ¸in each box to indicate how
well you know and understand each Key Term. q I know and understand this Key Term.
(b) Is the bus market in your area a monopoly, an oligopoly or a competitive market?
q I am still a bit uncertain about what this Key Term means. q I don’t understand this Key Term yet.
(c ) Has deregulation been a good or a bad thing for bus users in your area? Give reasons for your answer.
When you revise each chapter, tick the boxes again to indicate how much you have learned.
Did you know? 128
Sometimes letting the free market operate can be considered damaging to the public interest. In such cases the public may demand that governments impose rules to control the market. For example, governments sometimes introduce rules to prevent popular sporting events, such as major soccer, rugby, hurling or football tournaments from only being shown on pay-to-view subscription television.
1. 2. 3. 4.
Gross pay is basic pay plus any additional payments such as overtime, commission or bonuses.
q q q
A salary is paid monthly. It is a fixed payment that doesn’t depend on the number of hours worked or the amount of goods produced or sold by the employee in a given period.
q q q JC BUSINESS - UNIT
1.indd 128 4/11/16 10:17:45 AM 340 365
A payslip is a written calculation of earnings given to an employee listing the amount paid and the amount deducted.
Basic pay is the amount that an employee is paid for a normal working week before any extra payments are added on.
q q q q q q JC BUSINESS - UNIT
1.indd 52 306 52
Payroll Managers are responsible for ensuring that wages are paid correctly and on time. They are employed by organisations of all types and sizes.
1,500 1,500 3,000
88 JC BUSINESS - UNIT
1.indd 88
Answer the question below, then discuss your answers with the rest of your class. 1. Have you ever purchased something on impulse and regretted it? 2. If yes, what was it? why did you buy it? why did you regret it? If no, what has stopped you from buying on impulse?
Competition is generally regarded as more efficient and better for consumers. As a result, governments have introduced laws to prevent firms in some markets becoming too large and acting like monopolies or oligopolies. The Competition and Consumer Protection Commission (CCPC) is the State agency responsible for promoting fair competition in the marketplace and protecting the interests of consumers. It can prosecute businesses that engage in unfair competition. Deregulation (or market liberalisation) is where governments remove barriers such as laws or restrictions in a market in order to make it easier for new suppliers to compete.
Numeracy The Kubiak’s house is valued at €180,000, but it is currently insured for €120,000. A fire in the kitchen results in a loss of €9,000. How much compensation are the Kubiaks entitled to receive?
Markets & Prices LO 2.13
Chapter 17 Smart Shopping
A Guide to Learning Tools and Icons in Business Breakthrough S
Contents
Business Breakthrough employs a range of innovative learning tools to promote Junior Cycle Key Skills and to engage students’ interest, comprehension and recall. These include the following:
Unit 1 Personal Finance
Q Key Features LO 1.2 1.10
Reducing Financial Risks with Insurance Unit 1 Personal Finance Unit 2 Enterprise Cash
1. What are digital technologies? . . . . . . . . 227
2. How can digital technologies help a business?. . . . . . . . . . . . . . . . 228
3.How can we pay for our shopping? Lucy paid for her shopping using cash from her savings. Anna used a gift card. However, when their parents go shopping they often use debit cards or credit cards to pay for their purchases. When shopping, consumers can pay with their own money or use borrowed money.
3. What are the risks to a business when using digital technologies? . . . . . . . . . . 231 Chapter Review . . . . . . . . . . . . . . . . . 234
Pay with our own money using…
For Junior Cycle Business Studies, you are required to be able to make just two adjustments: • Adjustment for closing stock • Adjustment for depreciation
Debit cards
Gift cards ¶
Bank location is a consideration. How far do you have to travel to a particular bank to get access to your savings? Do the opening hours of the bank suit you? Can the savings be accessed online instead? Investments in shares can be sold easily if bought on the stock market. Investment in property or other assets can take months to find a seller and get your money back. Investments in life assurance policies can sometimes be cashed in early but usually at a high financial cost.
Insurance companies can settle compensation claims in three ways: Pay cash compensation to the insured. This is the most common method. Replace the asset if the item is completely lost or destroyed. Repair where a partial loss or damage occurs to an asset.
226 Unit 3 Our Economy
¶ ¶
JC BUSINESS STUDIES UNIT
2.indd 226
5. 6. 7. 8.
Use cash Paying with cash means using notes and coins. In Ireland, the Euro is used as the currency and is the legal tender. Legal tender means that the notes and coins must be accepted as payment by retailers if offered by a customer. Paying with cash allows payment to pass immediately to the seller and the customer becomes the owner of the goods straight away. Paying with cash is very common. The main benefits of paying by cash are: You know how much you have available to spend and how much you have left over. Since you can only spend the money you have, you cannot get into debt.
2. How are adjustments made to final accounts? All adjustments need to be entered twice – once in the income statement and
(e) What is the risk? Savings and investments can differ significantly in terms of the risk to your money. You will need to know how safe your money will be. If it is a savings account, are your savings guaranteed to be repaid to you? Some savings schemes guarantee a minimum rate of interest. Others guarantee that you will not lose any of your investment. Some savings are covered by the Central Bank’s Deposit Guarantee Scheme, while others, such as An Post products, come with a full and unlimited State guarantee. If you buy property or an insurance endowment policy you may lose some of your money. If you buy shares you could potentially lose all of your money.
Loans, Hire Purchase and Credit Cards are covered in Chapter 8: Borrowing Wisely
As a child, Canadian Guy Laliberté was brought to the circus and was so impressed by what he saw that he decided to become a circus performer. Over the following years, he learned many different circus tricks until eventually, as an adult, he decided to become an entrepreneur and to set up his own circus. However, this would be a circus without animals. Instead, jugglers, acrobats and clowns would make it more like the theatre than a circus. Live, original music, magical lighting, fantastic costumes, a lavish set design and amazing stunts were to be the unique selling points of the circus.
Loans Hire Purchase ¶ once in the statement of financial position. 4/11/16 10:17:12 AM LO 1.2 1.6 361
Adjustments for closing stock The closing stock figure is given with the trial balance. • Subtract closing stock from cost of sales in the trading account part of the income statement.
Guy called the enterprise Cirque du Soleil (Circus of the Sun) and financed the business using his own savings, grants and bank loans. Hard work and determination, along with a good business plan and marketing mix helped the business to grow. Today, his business employs over 4,000 people, tours all over the world, sells millions of tickets and generates sales of hundreds of millions of euro every year. Cirque du Soleil is now one of the biggest global brands in show business. Using digital technologies is essential to the success of the business.
Accountants prepare annual reports and financial statements for planning and decision making, and advise on tax laws and investment opportunities.
47
Investment Tip When you buy Lotto tickets you are simply playing a game of chance. Don’t buy Lotto tickets or scratch cards and think they are an investment. The odds of winning are tiny and you are guaranteed nothing. If you do win, you are just very, very lucky.
4/11/16 10:47:44 AM
• Enter closing stock as a current asset in the statement of financial position.
Adjustments for depreciation Depreciation is the gradual loss in value of a fixed asset over time due to age, wear and tear or obsolescence. This is an expense to the business and needs to appear as an expense in the profit and loss account. It will also be reflected in the value of assets in the statement of financial position. The residual value of an asset is its value after depreciation has been deducted.
(f) How ethical is my choice? There have been many scandals concerning banks that have behaved unethically by overcharging customers on fees and by over-lending to customers. These problems are most common with financial institutions that operate as for-profit businesses. Smart customers should look at the ethical reputation of a financial institution before deciding where to save or invest their money.
Capital is anything man-made which is used in the production of goods and services.
Did you know?
Opportunity cost refers to the thing that is done without when choosing another option.
q q q
Enterprise refers to the person or business that combines the other three factors of production to produce a product or service.q q q
Microeconomics looks at the behaviour of consumers and businesses in different types of markets to try and understand their decision-making process.
51
9. Did you know? 16.
4/11/16 10:17:19 AM Key Concepts Key Concepts
In developed countries like Ireland, only about 10% of money takes the form of banknotes and coins. Over 90% is ‘electronic money’ that only exists as numbers in bank accounts.
The main causes of asset depreciation include: • Age: A three-year-old delivery van will usually be worth less than a one-year-old version of the same van.
1. Explain what is meant by the term ‘economics’. 115 3. Explain what is meant by the term ‘opportunity cost’.
2. (a) Explain the two key causes of inflation. (b) List three implications of high inflation.
4/11/16 10:17:39 AM
2. (a) Name and explain the four factors of production. (b) Explain, in your own words, the importance of enterprise in the production of goods and services.
1. (a) Explain three causes of unemployment. (b) List three implications of a high unemployment rate.
• Usage: The more an asset, such as a machine, is used, the less it will be worth if you try to sell it. • Obsolescence: Assets such as computers can quickly become obsolete (outdated) as new and more powerful models become available.
4. Distinguish between the terms (a) microeconomics and (b) macroeconomics. Critical Thinking Skills
JC BUSINESS STUDIES UNIT
2.indd 306
5. (a) Explain what is meant by the term ‘business cycle’. (b) Explain two benefits of economic growth.
3. (a) Explain what is meant by interest rates. (b) Name the organisation that sets the minimum interest rates in Ireland.
1. Freddy Jones set up and runs the Killarney Furniture Factory. It is a very successful business which employs twenty staff and uses state of the art equipment to produce a wide range of wooden tables, chairs and other furniture.
6. (a) Identify two possible negative effects of economic growth. (b) What is meant by sustainable development? (c) What is meant by a low carbon economy?
Critical Thinking Skills
Describe how each of the factors of production might be used to make the business a success.
2. BMC Bank operates 200 branches across Ireland. The bank is profitable and has a budget of 100 million to expand the business over the next two years. It has identified four potential projects to spend the money on. 1. Open 50 new branches. 2. Invest in a new and more secure online banking system. 3. Purchase a rival bank. 4. Invest in a major new marketing campaign.
1. If the rate of unemployment rises, give one effect that this could have on: (a) A local supermarket business. (b) The likelihood of shop workers looking for a pay rise.
2. If inflation increases rapidly, give one effect that this could have on: (a) Households trying to prepare a budget for the year. (b) The likelihood of shop workers looking for a pay rise. (c) Businesses trying to plan their cash flow.
Which project would you select to invest €100 million in over the next two years? Explain your answer.
3. If interest rates double, give one effect that this change could have on: (a) The likelihood of households saving their money in a bank. (b) The likelihood of households borrowing money for a new car.
4. (a) What is economic growth? (b) Distinguish between an economic boom, an economic recession and an economic depression.
4/11/16 10:44:2 4/11/1
A low carbon economy is very energy efficient and uses renewable energy sources such as wind, solar and wave power instead of fossil fuels.
q q q 4/11/16 10:17:34 AM q q q q q q
Macroeconomics looks at the decisions made at national and international level by governments bodies, such as the European Union, to understand how the economy works as a whole. q q q
Economic Indicators 4/11/16 10:59:43 Credit Cards Pay with borrowed money using…
Learning Outcomes 2.6
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