Role of Business in Society Flashcards
What do businesses exist to do?
Businesses exist in order to satisfy our NEEDS and WANTS. They provide us with GOODS and/or SERVICES that we CONSUME.
What is a Need?
A Need is what we require in order to survive (food, water and shelter)
What is a Good?
A Good is a physical product that we can see and touch (e.g. Newspapers, Jackets, Pencils)
Goods can be DURABLE (used more than once) and NON-DURABLE (single use)
What is a Want?
A Want is goods/services that make our life’s more enjoyable and pleasurable, but we don’t require in order to survive (e.g. game consoles, TVs, cars)
What is a Service?
A Service is something that is provided for us by an organisation (e.g. taxi, cinema, haircut)
What is a Consumption?
A Consumption is the “using up” of a good/service (e.g. wearing a jacket, eating a sandwich, watching a film at the cinema)
What are the 4 stages of The Cycle of Business?
1-Consumers have needs and wants.
2-Businesses carry out market research to identify those needs and wants.
3-Businesses produce goods and services.
4-Goods and services are bought and consumed.
What are the 4 Factors of Production?
1-Land
2-Labour
3-Capital
4-Enterprise
What does Land refer to?
Land refers to natural resources and includes not only the surface of the earth but all other resources discovered within it (e.g. oil, fish, coal, iron ore, crops and trees)
What does Labour refer to?
Labour refers to human resources (e.g. employees who work for the business)
What does Capital refer to?
Capital refers to human-made resources (e.g. the buildings, machinery and equipment used in the production process)
What does Enterprise refer to?
Enterprise refers to the art bringing together the other factors of the production in order to produce goods and services. The ENTREPRENEUR is the risk taker.
What is the Chain of Production?
The Chain of Production is the stages a product passes through from start to finish.
At each stage of the Chain of Production, VALUE IS ADDED to the product. This is known as CREATING WEALTH.
What are the 3 Sectors of Industry?
1-Primary
2-Secondary
3-Tertiary
What does Primary mean?
Primary is when businesses are involved in the extraction of our natural resources from above and below the earths surface (e.g. farming, fishing, forestry, coal mining)
