Chapter-1 Flashcards
Business activity
What is business activity?
Business activity is the process of producing goods and services to satisfy consumer demand.
What are needs?
Needs are a goods and services which is essential to living.
What are wants?
Wants are goods and services which people would like, but is not essential for living.
What is the economic problem?
An economic problem arises when unlimited wants exceed finite resources.
What are the factors of production?
Factors of production are the resources needed to produce goods and services- land, labour, capital and enterprise.
What is land?
Land is all natural resources such as minerals, ores, fields, oil and forests.
What is labour?
Human effort used in producing goods and services.
What is capital
Capital is machinery, equipment and finance needed for production of goods and services.
What is enterprise?
Risk bearing and key decision making in business.
What is scarcity?
A situation where unlimited wants exceed finite resources.
What is opportunity cost?
Best alternative forgone.
What is specialisation?
Specialisation is when people and businesses concentrate on what they are best at.
What is division of labour?
Division of labour is when production is divided into separate tasks and each employee does just one of those tasks.
What are consumer goods?
Consumer goods are products which are sold to the final consumer. They can be seen and touched, for example computers and food.
What are consumer services?
Consumer services are non-tangible products such as insurance and transport.
What are capital goods?
Human-made goods used in production.
What are the different types of goods and services that businesses sell?
1) Consumer goods
2) Consumer services
3) Capital goods
What are durable consumer goods?
Durable consumer goods are goods which can be used over and over again, for example television computers, cars, tables and chain.
What are non durable consumer goods?
Non-durable consumer goods are goods which can only be used once, for example food and drink.
