CHAPTER 29 – INTRODUCTION TO ECONOMICS Read the text below and answer the questions that follow.
James and Hayley McKevitt set up a bakery, The Oven Glove, in their local town. The bakery sells a range of delicious cakes and breads to the local market.
James has a background in finance and looks after the accounts and the day-to- day running of the business.
Hayley is responsible for the production of all the breads and cakes. The raw ingredients are all sourced locally.
They both work full time in the business. They also employ two part-time staff.
The McKevitts have invested €30,000 of their own money into the business. They also have a Local Enterprise Office grant and a bank loan. This money was used to invest in machinery and specialised equipment for the bakery.
1. Name the economic resources in this example. 2. What will the economic return be for: a. The part-time staff? b. The McKevitts?
A Cereal business
In pairs, go to page 208 of your Activities and Accounts Book to consider the resources you would need to start your own breakfast cereal business.
SCARCITY OF ECONOMIC RESOURCES
In Strand 1, we learned about our personal resources (e.g. money, skill, time) and that we have to make choices about which needs and wants we can satisfy based on those resources. For example, if you want
a smartphone that costs €200 but you only have €150, you will have to choose to buy a less expensive phone or wait until you have enough money to buy the phone you want.
This is called the basic economic problem – our needs and wants are unlimited but economic resources are limited.
The gap between unlimited needs and wants and limited economic resources leads to scarcity. Scarcity requires that choices are made.
