business in the real world - purpose and nature of businesses Flashcards
What is a business?
An organisations which provides a good or service.
What are the two types of products?
Goods and services.
What is a good?
Physical items a business sells.
What is a service?
Actions performed by a business to aid the customer.
What are needs?
Things which the customer cannot live without.
What are wants?
Things the customer would like to have, but can survive without.
Give 2 reasons why a business would be set up.
- Produce goods
- Supply a service
- Distribute products
- Fulfil a business oppurtunity
- Provide a good or service to help others
What are the four factors of production?
Capital, Enterprise, Land, Labour.
As a factor of production, what is capital?
The equipment, factories and schools that help produce goods and services.
As a factor of production, what is enterprise?
The risk undertaken by an entrepreneur in transforming the other factors of production into output in order to gain a reward, usually profit.
As a factor of production, what is land?
Natural resources such as agriculture, fishing, forestry, oils.
As a factor of production, what is labour?
The work done by the people who contribute to the production process.
What is oppurtunity cost?
The benefit that is given up in order to do something else.
What is the primary sector?
Businesses which produce raw materials used to make goods and services.
Give an example of a business in the primary sector.
- Farming industry
- Fishing industry
- Mining industry
