Self-employment

Activity 4:

To choose the correct statement and motivate your choice

[lo 1.3]

Imagine that you, as the leader of a particular community, have decided that the price of shoes is exorbitantly high. You promulgate a law enforcing a drastic reduction of shoe prices on all producers of shoes.

What will shoe dealers (entrepreneurs) who do not know of the law think when they see the reduced prices at the shoe factories?

≤ Consumers want more shoes.

≤ Consumers want fewer shoes.

Which of the statements that follow will be true once the law is established?

≤ More entrepreneurs will enter the shoe trade.

≤ Fewer entrepreneurs will enter the shoe trade.

≤ There won’t be any difference.

Reasons for your answer:

• Profit

A trader cannot force a consumer to buy from him. The consumer has the choice of buying many different articles from thousands of traders. Why would he buy from any particular trader?

This is a problem that affects every businessman. How can any client be persuaded to buy from his business and not from a competitor? He therefore has to ensure that his prices are as attractive as possible, but this makes it more difficult to make a profit .

Activity 5:

To plan ahead and create interest for your product

[lo 4.1]

At market day you run a cake stall selling homemade cakes. You discover that there will be another similar stall. How can you attract clients to your stall?

What will work better:

• Selling whole cakes?
• Selling slices of cake?

Why?

Do you think it is wise to have a cake stall at a school market day?

Why?

It is important to sell products in which consumers have some interest.

You have to offer your services at a price that consumers are willing to pay for that service.

Assessment

Memorandum

• Read and discuss the newspaper report about a young entrepreneur who saw an opportunity to generate an income.

• Study the information that has been given about self-employment in six different countries, draw conclusions and present the information graphically once the data have been converted to percentages.
• Read and discuss the paragraph by way of an introduction to economic principles.
• Guide the learners to realise that private property ownership leads to motivation and a pride in own “products”.

• Here learners come to realise that (the development of) “money” as a means of payment (commodity used for barter) is indispensable and that the price of a product is determined by the demand that exists for it.

• Here learners are guided to understand the fine balance between an attractive selling price and a good profit on products.