Unit 1 ( business activity) Flashcards
Needs
Goods or services that we need to survive
Want
Goods and services people or consumers desire but aren’t essential for living
Business Activity
the process of producing goods and services to satisfy consumer demand
Economic problem
Unlimited wants can’t be met because there are limited resources (factors of production)
Scarcity
There are not enough goods and services (supply) to meet the demands of the population
What are the four factors of production?
Capital
Labour
Enterprise
Land
Capital
Machinery, equipment and finance needed to produce goods and services.
Enterprise
People prepared to take a risk and set up a business
Labour
Number of people available to work
Land
Natural resources (water,oil,forests,livestock)
Opportunity Cost
The benefit that could have been gained from an alternative use of the same resource
Specialisation
When people and businesses concentrate on what they do best so production is more efficient
Division of labour
The breaking down of the production process into small parts with each worker allocated to a specific task.
Consumer goods
Tangible goods sold to consumers
Consumer services
Intangible goods sold to consumers
Capital goods
Goods sold to other businesses to help them in their production process
Primary sector
Firms whose business involves the extraction of natural resources e.g fishing, farming, mining.
Secondary sector
Firms that process and manufacture goods and natural resources and transforms raw materials into finished or partly finished goods e.g manufacturing, refining
Tertiary sector
Firms that supply a service to consumers and other businesses e.g shops, banks, cinemas.
Industrialisation
The growing importance of the secondary sector and reduced importance of primary sector activities.
De-industrialisation
The growing importance of the tertiary sector and released importance of the secondary sector.
Public sector
The part of the economy that is controlled by the state of government
Private sector
The part of the economy that is owned and controlled by individuals and companies for profit.
Mixed economy
An economy where the resources are owned and controlled by both the private and public sectors.
