Commerce
Grade 8
(3nd Term Notes)
UNIT 05
ECONOMICS
LEARNING OUTCOMES
i. Introduction to Economics
ii. Introduction to Demand
a）Demand curve
b）Factors affecting Demand
iii. Introduction to supply
a）supply curve
b）Factors affecting supply
Accounting
INTRODUCTION TO ECONOMICS
Economics is a social science concerned with the production,
distribution, and consumption of goods and services.
It is a study of how individuals, businesses, governments, and nations make choices on
allocating resources to satisfy their wants and needs, trying to determine how these
groups should organise and coordinate efforts to achieve maximum output.
INTRODUCTION TO DEMAND
Demand can be defined as the quantity of a good or service that consumers are
willing , able and plan to buy at a given price during a given period of time.
e.g. Martin’s Candy is a sweet shop selling various kinds of sweet for kids. On 10th of
May the price of one bar of chocolate was Rs. 50. During the day, 20 bars of
chocolates were bought by customers. Therefore, the demand for chocolates on 10th
of May was 20 bars of chocolates at the price of Rs. 50
It is important to remember that demand is always mentioned in terms of,
* A particular price
* A particular time
* A particular quantity
Effective Demand
Effective demand refers to the willingness and ability of consumers to purchase
goods at different prices. It shows the amount of goods that consumers are
actually buying .
Effective demand excludes latent demand - where the willingness to purchase
goods may be limited by the inability to afford it or lack of knowledge.
Law of Demand
The law of demand states that the price and quantity demanded have a
negative relationship (lnverse relationship）.
While all other factors remain constant, the higher the price the lower will be the
demand,and the lower the price the higher will be the demand of a product.
Factors affecting Demand
Various factors affect the changes in demand. Due to these factors, demand
for a particular product may increase or decrease.
Demand is affected by factors such as:
1. The price of the product (Main factor）
2. Changes in the consumer’s income
3. Changes in population/number of consumers
4. Changes in fashion/trends
5. Advertising
6. Changes in prices of substitute or complementary products
The Demand Schedule
A demand schedule is a table which lists the different quantities demanded for a
product at different prices over a given period of time.
The following schedule shows the price and quantity demanded for rice over a period of
one week.
Price Quantity Demanded（Qd）
10 1000
20 800
30 600
40 400
Demand Curve
The demand curve is a graphical representation of the relationship between the
price of a good or service and the quantity demanded for a given period of time.
The‘x’ axis representsthe Quantity demanded and the‘y’ axis representsthe price.
The demand curve is a downward sloping linear curve duetothe law of demand.
INTRODUCTION TO SUPPLY
The quantity of a product that a producer is willing and able to sell
to the market at a given price during a given period of time is called supply.
Supply is also always mentioned in terms of,
1. A particular price
2. A particular time
3. A particular quantity
Law of Supply
The law of supply states that the price and quantity supplied have a positive
relationship (Direct relationship）.
lt means that while all other factors remain constant, the higher the price, the
higher will be the supply. Therefore, the lower the price the lower will be the
supply of a product.
Economicsunit05
The Supply Schedule
"A supply schedule" is a table which lists the different quantities supplied for a product at
different prices over a given period oftime.
The following schedule shows the price and quantity supplied for sugar over a period of one
month.
Price Quantity Supplied（kg）
Rs. 100 5000
Rs. 80 4000
Rs. 60 3000
Rs. 40 2000
The Supply Curve
The supply curve is a graphical representation of the relationship between price of
the product and the quantity supplied for a given period of time.
Factors affecting Supply
Supply is affected by factors such as:
1. The price of the product (Main factor)
2. Changes in the prices of resources / raw materials
3. Changes in the cost of production
4. Changes in taxes and subsidies
5. New technology
6. Weather
7. Changes in the number of suppliers
Unit 05 - Activities
Activity 01
Complete the puzzle.
Across
1. The quantity of goods or
services producer is willing or
able to sell.
3. The person who buys the
product or a service.
5. Monetary value of a product
or service.
Down
2. S omething a consumer buys
to satisfy his needs and
wants.
4. The ability and need to buy
goods and services.
5. A person or a company
who makes a product.
Activity 02
The P refect Board of a certain school is raising money for a blood donation
campaign by selling ice cream in the school premises. Their target is to sell 100 ice
creams each day. Fill in the blanks with one of the following terms: demand, supply.
A. On the first day they could sell all the ice cream in just a few minutes. What
was higher?
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B. On Tuesday they increased the quantity of ice cream by another 50. What did
they increase?
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C. The Prefect Board decided to lower the price of an ice cream cone. What will increase?
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D. The Prefect Board will try to increase the ---------------------------- if the price of
an ice-cream cone increases by Rs.10.
Activity 03
Apollo Toys are an internationally recognised brand of toys. Given below is a table
of the demand and supply schedules for different prices of toys in a particular city
for one week.
Price of a toy Demand for toys per Supply of toys per week
week
E10 950 700
E20 800 800
E30 600 900
E40 450 1150
Draw the supply and demand curve on the same graph for the above
schedule of Apollo Toys.
UNIT 06
PRODUCTION
DIVISION
LEARNING OUTCOMES
i. lntroduction to Production
ii. Factors of Production
iii. Types of Production
a）Labour lntensive Production
b）Capital lntensive Production
INTRODUCTION TO PRODUCTION
Production can be simply defined as “the process of transforming
raw materials or inputs into finished goods or products through a
manufacturing process” .
The role of the Production Department
1. ldentifying inputs.
2. Scheduling production.
3. Minimising production cost.
4. Ensuring the quality of products.
5. lmproving the existing products.
The production process
Transformation
Input Process
output
Value Addition
Value addition is the difference between the price of the product
and the cost of producing it.
Value addition = Selling price - cost of inputs
Value addition takes place during the process of production.
FACTORS OF PRODUCTION
The resources used to produce goods and services are known
as Factors of Production.
Reward for the Factors of Production
TYPES OF PRODUCTION
According to the technique used in the production process, production can be
classified as, 1. Labour lntensive Production
2. Capital lntensive Production
Labour Intensive Production
This is when more human labour is used for production than technology.
Advantages and disadvantages of labour intensive production
Capital Intensive Production
This is when more capital / technology is used for production than human
labour.
Advantages and disadvantages of capital intensive production
Unit 06 - Activities
Activity 01
Select the most appropriate answer from the answers given below.
i. production can defined as,
a）creating good or a service.
b）the process of transforming raw materials or the inputs into a finished product.
c）the process of providing raw materials.
ii. One of the tasks performed by the production department is,
a）establishing standards regarding the quality and the quantity of the
products produced.
b）determining the price of the product.
c）promoting the product.
iii. What do you mean by “value added”?
a）The difference between the price of the product and the cost of producing it.
b）The value added to the price of the product.
c）None of the above.
iv. All the natural resources used in the production process are known as,
a）labour.
b）capital.
c）land.
d）entrepreneurship.
v. Capital intensive production,
a）is where human labour is used rather than technology.
b）is where both labour and machinery are used equally.
c）is where modern technology and machinery are used more than labour.
Activity 0 2
Classify the following pictures according to the factors of production.
Activity 0 3
1. Match part A with part B.
2. Read the following case study and answer the questions given below.
Sehas, who likes to bear risks and invent new things, started a business by
producing shoes. He bought raw materials like leather, treats, colours, and
buttons from one of his friends. He employed 10 skilled workers and a machine
to make the shoes. His business grew by the day and now it is being done on a
large scale with more machinery.
Assume that the cost of producing a pair of shoes is Rs. 500, and is sold for
Rs. 1100.
i. What is the production activity that you can see in the above case?
ii. What are the factors of production in the above case? Give examples from
the case.
iii. ldentify the production technique used before and after the growth.
iv. What are the advantages of labour intensive production techniques?
v. What is the value added in the example?
UNIT 07
HUMAN RESOURCES
MANAGEMENT
i. Introduction to Human Resources Management
a）lmportance of Human Resources Management
b）Functions of Human Resources Management
ii . P a y ( c o m p e n s a t i o n a n d be n e f i t s ）
iii. Leadership
iv. Employee Relations
v. Motivation
INTRODUCTION TO HUMAN
RESOURCES MANAGEMENT
Human Resources Management (HRM）is the management of the
people or employees in an organisation.
Human resources are the people in an organisation. People working in an
organisation are considered as one of its key resources because it is they who can
help to make an organisation successful.
Importance of Human Resources Management
1. To find the right people for the right jobs.
2. To help people work efficiently.
3. To improve the productivity of employees.
4. To motivate the employees.
Functions of Human Resources Management
PAY（COMPENSATION AND BENEFITS）
Pay / Compensation and benefits refer to the compensation/salary and other
monetary and non-monetary benefits provided on by a firm to its employees
Smart employers know that keeping quality employees require providing the right
compensation and benefits package (pay）.
Compensation includes wages, salaries, bonuses and commission structures.
Importance of Compensation and benefits（ pay）
1. Attracting top talent.
2. lncreased employee motivation.
3. Boosts employee loyalty.
4. lncreased productivity and profitability.
5. Job satisfaction (Therefore employees will be retained in the organisation）.
LEADERSHIP
Leadership is the art of motivating / influencing a group of people to act
towards achieving a common goal
Importance of leadership
unit07 Human Resources Management
Qualities of a Leader
Quality Description
A leader needs to possess a high level of
lntegrity morale and honesty. He should have a fair
outlook and should base his judgment on facts
and logic. He should be objective and not biased.
A good leader takes the first step to grab
lnitiative opportunities without waiting for them, and use
them to the advantage of the organisation.
A leader needs to be a good
Communication skills communicator who explains ideas, policies,
and procedures clearly to employees.A
leader should not only be a good speaker, but
also a good listener, counsellor, and persuader.
A leader needs to be an effective motivator
Motivation skills who understands the needs of employees and
motivates them by satisfying those needs.
Leaders need to have a high level of self-
confidence and strong determination and should
Self-confidence and not lose it even in the worst situations, or else
will power employees will not believe in them .
Leaders need to be intelligent enough to analyse
lntelligence the pros and cons of a situation, and
accordingly, take decisions. Also requires fore-
sightedness and a vision to predict the future
impact of the decisions they will take.
A leader has to be decisive when managing work
Decisiveness and should firmly take decisions.
A leader should possess empathy towards others
Social skills and be a humanist who also helps people
with their personal problems.
Leadership styles
1. Autocratic leadership style
lt refers to a leadership style where the leader takes all the decisions by themselves.
2. Democratic leadership style
lt refers to a style where the leader consults their subordinates before making the final
decision.
3. Laissez - faire leadership style
lt refers to a style where the leader gives his subordinates complete freedom to take
decisions.
EMPLOYEE RELATIONS
Employee relations is the relationship between the employer and employees
Happy employees are productive employees. Successful businesses know
how to manage relationships to build long lasting employee satisfaction.
An organisation with a good employee relations programme provides fair and
consistent treatment to all employees so they will be committed to their jobs
and be loyal to the company. Such programs also aim to prevent and resolve
problems arising from situations at work.
One of the most effective ways for a company to ensure good employee relations
is to adopt a human resources strategy that places a high value on employees.
Resourcesunit07
Management
MOTIVATION
Motivation is the level of commitment, energy and creativity an
employee brings to the job.
Motivation is the reason why people work hard. people are motivated by different
factors. lt becomes part of the responsibility of the Human Resources Department
to understand different factors that motivate employees and use them to keep the
employees interested in performing their best at work.
Importance of Motivation
Better productivity.
* Lower level of absenteeism.
* Lower level of staff turnover.
* lmproved industrial relations with trade unions.
* Contented employees give the firm a good reputation.
* Improvement in product quality and customer service.
Methods of motivating employees
_ 1. Financial / Monetary Motivation
This refers to all the benefits given by the organisation in terms of money.
* Wages and salaries : Wages are paid weekly/hourly to manual workers, who are
called blue-collar workers.
Salaries are paid on a monthly basis to office an management staff. They are
called white-collar workers.
* Commissions: This refers to the payment done to an employee after
completing a task
(e.g. selling a certain number of products or services）.
* Bonus: Bonus is the extra payment which is received by employees as a
reward for performing well.
2. Non - financial / Non - Monetary Motivation / Fringe Benefits
This refers to all the benefits given by the organisation other than money.
e.g. * Company car and fuel.
* Housing / free accommodation.
* Expense accounts .
* Discounts on the firm’s products.
* Trips and holidays.
* Mobile phone.
* Health insurance.
Demotivation
Demotivation is the lack of interest and enthusiasm towards the job.
This lack of interest and enthusiasm for work can have disastrous consequences
for an organisation.
A demotivated employee can experience lack of motivation temporarily or, in the
worst cases, permanently. This is when managers have a great role to play. lt’s
important to tackle the issue before it goes deeper and negatively impact other
team members.
Problems of Demotivation
1. Lower level of involvement or commitment.
2. Unusual delays and increased absenteeism.
3. Impression that the employee is intentionally damaging projects or acting as a
roadblock.
4. Repeated mistakes or signs of thoughtlessness.
5. Negative behaviours and attitudes.
6. Lower productivity and performance.
Unit 07 - Activities
Activity 1
Test your knowledge
Find the definition for following situations in the grid above.
i. Tom Smith received a letter from his company asking him to stop work from
next month.
ii. Harry received a warning letter from the HR manager for sharing
organisational secrets with outsiders.
iii. Lambert, being recognized as the best employee of the month.
iv. Lisa, the receptionist being appointed as the executive tour operator.
v. Aeron, the sales representative, received a commission for doing an extra
amount of sales this month.
vi. Rachel has been selected to attend the annual training conference in USA.
vii. Steven was shy to take up his new position, and his boss replied that great
things never come from comfort zones.
viii. Holan, the CEO, comes to the office greeting his people with a friendly "Good
Morning".
ix. lvy received a hamper for Christmas and a grocery voucher from her company.
x. Duke, the window cleaner, received his daily payment from his company.
xi. Roger, the high school teacher, received his monthly payment from Usborn
high school.
xii. Teran hates his boss and work in his stressful job.
Activity 02
Test your knowledge.
Define the following situations as per functions of Human Resources.
* Lochana, being caught for eating a KFC chicken bucket during duty and
being sent a letter of warning.
* Lochana, being assigned to wash the dishes in the kitchen as a Top-down
training (360o training).
* Lochana emailed a CV to KFC for the post of marketing manager.
* Lochana receiving his letter of appointment requesting to start work with
effect from 1st February 2020.
* The KFC management decides to pay a salary of Rs.30, 000.
* KFC providing hand gloves and aprons to kitchen staff.
* Lochana facing an exam for selection.
* KFC maintaining a commission based salary scheme, provided with a
company car.
* Lochana is searching for a job opportunity.
Activity 03
Cartoon Review
Read the following comic strips extracted from [Link] and by office guy cartoons.
Analyse each leadership style,the possible conflicts that can arise from such
leadership styles,impact on workers and your advice on corrections to these
leadership styles.
unit07 Human Resources Management
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