business activity (apt 1) Flashcards
What is a want?
Good/service that people would like to have but not essential for living
What is a need?
Good/service essential for living
What is scarcity?
Lack of sufficient products to fulfil total wants of the population
What is the economic problem?
Unlimited wants but limited resources to produce goods and services to satisfy those wants. Creates scarcity
What is the factors of production?
land, labour, capital and enterprise
What is the opportunity cost?
Next best alternative given up by choosing another item
What is specialisation?
People or businesses concentrate on what they are best at
added value?
difference between the selling price and the cost of materials
primary sector
extracts and uses natural resources of Earth to produce raw materials used by other businesses
secondary sector
manufactures goods using the raw materials provided by primary sector
tertiary sector
Provides services to consumers
capital
the money invested into the business by the owners.
entrepreneur
is a person who organises operates and takes the risk for a new business venture.
profit?
the money gained after earning back the cost to make a product.
a business plan
document containing business objectives and important details about operations, finance and owners of business
social enterprise?
has social objectives as well as an aim to make a profit to reinvest back into the business.
how do governments support business start ups?
Business help - organise training for entrepreneurs
Premises - provide low cost premises to start up business
Finance - loans at low interest rates
Grants - for capital or to train employees
Research - universities make their research facilities available
characteristics of a successful entrepreneur
Creative, hardworking, optimistic, risk taker, motavation
pros of specialisation?
Workers are trained in a specific task which increases efficiency
Saves time and energy - production is faster
Quicker to train workers as they only focus on one task
Workers can develop skills as they do the same task repeatedly and master it
cons of specialisation?
Boring to do the same task repeatedly
If one worker is absent and no one else can do the job, entire production might halt
land?
Natural resources that can be obtained from nature
capital?
Finance, machinery and equipment needed for the manufacture of goods
labour?
Number of people available to make products
enterprise?
risk taking ability of the person who brings other factors of production together to produce a good/service. Reward is profit from the business
