Chapter 1 Flashcards
What are the factors of production?
- Labour
- Capital
- Land
- Enterprise
What are capital goods?
Physical goods used by the industry to aid in the production of other goods and services
Eg machines and vehicles
What are consumer goods?
Physical and tangible food sold to the general public. Made up of both durable and non durable consumer goods
Eg. A fridge is durable and food is non durable
What are consumer services?
The non-tangible products sold to the general public
Eg. Hotel accommodation, insurance services, train journeys
What are the key concepts in Business?
- Change
- Management
- Customer focus
- Innovation
- Creating value
- Strategy
What is innovation?
This is reinventing and seeking to create new ideas, creating a niche in the market
Also helps stay ahead of competition (until other copy)
How are added and creating value different?
Added value is the noun, the physical amount of money between the cost of the brought in products and the output. Whereas creating value is the process of increasing the gap in money between what you bought and sold.
For example, creating ice cream from raw materials is creating value.
The difference between the price of raw ingredients and the price for which you sell the ice cream, is added value
What should you remember about the next preferred option in opportunity cost?
That opportunity cost only applies to the 2nd/ next item lost out on, not latter options
What is the purpose of business activity?
Businesses use resources to provide products/services in demand, to customers. It helps us A.S. hi eve a higher standard of living than if we remained sel-sufficient.
What is the nature of economic activity?
Economic activity has an unsolved issue where, although economic activity is to provide for as many as possible, many are still left wanting more.
Rich have satisfied needs but not wants, poor have both unsatisfied needs and wants with a lack of means to obtain them.
What is the problem of choice?
The problem of choice is having to make a decision on which products/services will satisfy us now and those which well forgo. This is because we cannot satisfy all of our wants.
Business environment is dum=namic?
Vu
Why do many businesses fail early on?
- Lack of record keeping
- Lack of cash and working capital
- Poor management skills
- Changes in the new business environment
What are features deemed to make up a successful entrepreneur?
- Innovative
- Commited
- Self-motivated
- Multiskilled
- Leadership skills
- Self-confident
- Risk taker
- Ability to bounce back
Why is innovation important?
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