1.1 Business Activity Flashcards
What are needs? Give examples
A good or service essential for living
- water, shelter
What is a want? Give examples
A good or service that people would like to have
Eg: chocolate
What is an economic problem?
There exist unlimited wants but limited resources to produce the goods and services to satisfying those wants. This creates scarcity
What is scarcity?
The lack of sufficient products to fulfill the total wants of the population.
WHAT IS OPPORTUNITY COST ???
The next best alternative given up by choosing another item
What is specialization?
Occurs when people and businesses concentrate on what they are best at.
What is division of labour?
When the production process is split up into different tasks and each employee perform one of these tasks.
What is added value?
The difference between the selling price of a product and the cost of the bought-in materials and components.
What are the factors of production?
The resources needed to produce goods or services. They are
Land
Labour
Capital
Enterprise
How can added value be increased?
Convenience - by making the product more convenient
Branding - by creating a unique identity that distinguishes it from competitors
Quality - customers are willing to pay higher prices for better quality
Design - enhancing the aesthetics and functionality of a product
What is USP’s?
Unique point of selling to attract new customers increase sales and profitability and create a loyal customer base.
What is the purpose of business activities?
To produce goods or services
Meeting customer needs
To add value to products and increase customer satisfaction
