Business Activity Flashcards
Why are businesses created
To sell goods and services
Why do businesses sell goods and services
To meet the needs and the wants of the people
What is a need
Something that is essential for survival
List 4 needs
Clothing, Shelter, Food, Water
What is a want
Something desirable but not necessary
List 5 wants
Phone, Netflix subscription, PLaystation, TV , Watch
What is the economic problem
People have unlimited want sbut limited resources
Where does scarcity come from
The economic problem
What is opportunity cost
Opportunity costs the value of the forgotten or not-picked item when making a decision
If i picked sneakers instead of a video game, what is the opportunity cost of the sneakers
The opporunity cost (true cost) of the sneakers is a vidioe game
What’s an example of how businesses experience opportunity cost
A business has $ 100,000 to invest in the business and has to choose to invest in better equipment or advertising
What’s an example of how businesses the economic problem
A retail store has R500,000 to spend. It must choose between expanding its inventory or upgrading its store layout.
What is specialization
Specialization is when people, economy or government, focus on a skill so they become more skilled
What is the division of labour
the breaking down of jobs at hand into smaller tasks and is given to different employees
What is added value?
The difference between the selling price and the raw material (selling price - cost of materials)
A company sells a product for R500, and the cost of materials is R200. What is the added value
=R500 - R200
=R300
List 5 ways a business can increase their added value
1) High level customer care
2) Diffrenciate products
3)Reduce the cost of bought materials
Increase the selling price
4) Additional benefits
5) Better product convenience
What is a non-profit business
A business that wants to help a community or have social goals
Is the government a for-profit organization or non profit. State the reason for your answer
The government is a non-profit organization. Its primary goal is not to make a profit but to provide public services, maintain infrastructure, regulate laws, and support the well-being of its citizens.
What is the purpose of business activity
To take inputs, add value to them and create products that meet customers needs
