1.1 The Purpose And Nature Of Business Flashcards
Need
Products you need in order to survive
Want
Products you want to have but don’t need
What is a business
An organisation which trades to make money
Products / goods
Physical items (tangible - can be touched)
Services
A service is an act that a business person carries out for you in exchange for money
Land
Buildings / offices
Labour
Work of staff
Capital
Money / machinery
Enerprise
Ideas and risk-taking
What are the factors of production?
Land, Labour, Capital, Enterprise
What are the sectors of industry
Primary, Secondary, Tertiary
Primary sector
Extracting raw materials
Secondary sector
Manufacturing
Tertiary sector
Providing a service
Opportunity cost
The value of the next best alternative, lost when we make a choice. For example; if our choices could generate a)£10,
b)£100, or c)£1000. The opportunity cost of choosing option c is the value of b = £100
Enterprise & Entrepreneurship
Enterprise is the act of doing business - investing and working in order to increase the value of raw materials or our actions.
Entrepreneurship is the act of creating new business ideas, taking opportunities, while being innovative and prepared to take risks in order to turn their money into more money.
