business unit 1 vocabulary Flashcards
need
a good or service that is essential for livint
want
a good or service that people would like to have but is not necessary for living, people have unlimited wants
economic problem
there are unlimited wants but limited resources to produce the goods and services to satisfy wants, this creates scarcity
factors of production
resources needed to produce goods and services. there are 4 factors of production ( land labour capital enterprise) and they are limited in supply
scarcity
the lack of sufficient products to fulfill the total wants of the population
opportunity cost
the next best alternative given up by choosing another item
specialization
when people and business concentrate on what they are best at
devision of labour
when the production process is split up into different tasks and each worker performs one go these tasks, it is a form of specialization
business
combines factors of production to make products (goods and services) which satisfy peoples wants
added value
it is the difference between the selling price of a product and the cost of bought in materials and components
primary sector
extracts and uses natural resources to produce raw materials used by other businesses
secondary sector
manufactures goods using raw materials provided by primary sector
tertiary sector
provides services to customers and other sectors of industry
de-industrialization
there is a decline in the importance of the secondary, manufacturing sector of industry in a country
mixed economy
has both a private sector and public sector
private sector
private individuals owns and runs business ventures
public sector
where the government owns and runs business ventures
