chapter1-3 Flashcards
Business Activities
the process of producing goods and services to satisfy consumer demand.
Need
a good or service which is essential to living.
want
a good or service which people would like, but is not essential for living.
Economic problem
unlimited wants cannot be met because there are limited factors of production. this creates scarcity
4 Factors of Production
the resources needed to produce goods and services-land,labour,capital and enterprise
scarcity
there are not enough goods and services to meet the wants of population.
opportunity cost
the benefit that could have been gained from an alternative use of the same resource.
Specialisation
people and business concentrate on what they are best at
Division of labour
production is divided into separate tasks and each employee does just one of those tasks.
consumer goods
products which are sold to the final consumer. They can be seen and touched, for example computers and food,
consumer services
non-tangible products such as insurance services, transport.
capital goods
The physical goods such as machinery and delivery vehicles, used by other businesses to help produce other goods and services.
primary sector
firms whose business activity involves the extraction of natural resources.
secondary sector
firms that process and manufacture goods from natural resources.
tertiary sector
firms that supply a service to consumers and other businesses
chain of production
the production and supply of goods to final consumer involves activities fro primary, secondary and tertiary sector businesses.
mixed economy
an economy where the resources are owned and controlled by both the private and the public sectors.
private sector
the part of the economy that is owned and controlled by individuals and companies for profit.
public sector
the part of the economy that is controlled by the state or government
Entrepreneur
an individual who has an idea for a new business and takes the financial risk of starting up and managing it.
