YR 9 EXAM REVISION ON TERMS Flashcards
what is production?
Production is the making of goods and offering of services in order to satisfy human wants and needs.
what are the factors of production?
Land
Labour
Capital
Enterprise
what is land and what the reward is?
This is also called a natural resource used in production.
Includes what is beneath the earth (land), what grows naturally on it, what is found in it, the sea, atmosphere, mountains, valleys, fish, plants etc.
The reward is rent.
what is labour and what are the three types and the reward?
Human resources used in production. There are three types:
Skilled – Highly trained workers.
Semi-skilled – Workers with little training such as stewards etc.
Unskilled – Workers who do not need training.
The rewards are wages/salaries.
what is capital and what is the reward?
Human-made items used in production of goods and services.
Examples include buildings, office desks, machineries and motor vehicles.
The reward is interest.
who is an entrepreneur and what are their reward?
He/She is the provider of capital.
He/She is the risk bearer.
He/She brings together the three other factors of production.
His/Her reward is profit/loss.
what is a scale of preference?
the list of wants or needs that a person writes or comes up with in order of their importance.
what is scarcity?
Scarcity means “limited in supply”.
The resources we have are not enough to satisfy all our unlimited wants and
needs.
what is opportunity cost?
It is measured in terms of the next best alternative given up when making a decision. Every choice made has an opportunity cost.
what are the types of production?
TYPES/STAGES OF PRODUCTION
Primary
Secondary
Tertiary
primary production?
Firms that extract food and raw materials from the earth e.g. farming, fishing, mining, quarrying, horticulture etc.
secondary production?
Firms that:
Manufacture – changing raw materials to finished or consumable items.
Construct buildings, roads and bridges.
tertiary production?
Provision of services to The general public and other firms e.g. retail shops, doctors, dentists, schools, hairdressers, advertising agencies, lawyers, financial advisers, insurance companies and banks.
what are other names that production possibility curve is also known as.
Production Possibility Curve is also known as:
Production Possibility Boundary;
Production Possibility Frontier; or
Product Transformation Curve.
Production Possibility Curve – Meaning
what is division of labor?
This when production process is broken down a number of tasks, with each task performed by a separate person or group of persons.
advantages of division of labor to workers?
Advantages for Workers:
Become skilled: workers can get skilled and experienced in a specific task which will help their future job prospects
Better future job prospects: because of the skill and training they acquire, workers will, in the future, be able to get better jobs
Giving each employee tasks that best suit her skills
disadvantages of division of labor to workers?
Disadvantages to workers
Boredom: Performing the same task over and over again may lead to boredom for the workers.
Reduced flexibility (specialist teachers
)
Lack of mobility: Due to specialisation workers might find it difficult to switch between occupations.
advantages to firms from division of labor?
Advantages to firms
Increased productivity: when people specialise in particular tasks, the total output will increase.
Increased quality of products: because workers work on tasks they are best suited for, the quality of the final output will be high.
Low costs: workers only need to be trained in the tasks they specialise in and not the entire process;
Faster: when everyone focuses on a particular task and there is no need for workers to shift from one task to another, the production will speed up
Increased profits: lower costs and increased productivity will help boost profits.
Disadvantages to firms from division of labor?
Disadvantages o firms
Increased dependency: The production may come to a halt if one or more workers doing a specific task is absent.
Quality may suffer if workers become bored by the lack of variety in their jobs
Advantages to the economy from division of labor?
Advantages to the economy
Better utilisation of human resources in the economy as workers do the job they’re best at, helping the economy achieve its maximum output.
Inventions arise: as workers become skilled in particular areas, they can innovate and invent new methods and products in that field.
disadvantages to the economy from division of labor?
Disadvantages to the economy
Labour immobility: occupational immobility may arise because workers can only specialise in a specific field.
Reduces the creative instinct of the labour force in the long-run as they are only able to do a single task repetitively and the previous skills they acquired die out.
What is Added Value?
It is the difference between what a business pays its suppliers, and the price that it is able to charge for the product/service.
Businesses can add value to their product/service by doing something with the raw materials and providing something ‘different’.
SOURCES OF ADDED VALUE?
SOURCES OF ADDED VALUE Quality Design Unique selling point Speed of service Branding Convenience
IMPORTANCE OF ADDED VALUE?
Every business must add value to survive and be
successful
The higher the added value, the more likely it is that a
business will survive, grow and be successful in the long
term
Benefits to a business of adding value: A business
can differentiate itself from its competitors
A business can save the cost on advertising and other
promotional activities once it has created a perception of
high quality and brand loyalty among its customers.
WHO IS AN ENTREPRENEUR?
An entrepreneur is an individual who
organizes and operates a business or
businesses, taking on financial risk to do so.
What are the qualities of a
successful entrepreneur?
Self motivation-passionate about their ideas
Positive attitude-Not discouraged by initial failure
Risk taker-Be ready to go through uncertainties
Innovative
Dependable-
-excellent leadership qualities
determined
Resourceful
effective Communicators
Achievement oriented
Self confident
Reasons for Business
failure?
Lack of finance
Poor choice of location
Poor management
Poor human resource relations
Poor business planning
lack of demand
increased competition
Becomes insolvent
why governments
support business start-ups/small
businesses?
To increase employment
Increase economic growth
Increased competition
Help them survive
Cater for local demands
what are contents of a business class?
executive summary company description product or service market analysis location of business finance cashflow forecast profit
Industrialization?
Industrialization is the process by which an economy is transformed from a primarily agricultural one to one based on the manufacturing of goods
de-industrialization?
the growing importance of the tertiary sector and the reduced importance of the secondary sector.
whats a mixed economy?
An economy where the resources are owned and controlled by both the private and public sectors.
types of private sector firms
sole trader partnerships limited companies franchise,joint ventures Social enterprise
types of public sector firms
government departments
public corporations
nationalized industries
what is a business plan?
it is a document that contains the businesses aims/objectives and important details about the operations,finance and owners of the business.
methods of measuring business size?
Methods of measuring business size
Sales turnover
Number of employees
Capital employed
Market share
sales turnover?
Is the money that you get from the
sale of products
The costs of sales have not been
deducted from this
Using this method to compare
businesses in different industries
can be less effective
This can be a good way to compare
the business in the same industry
capital employed?
Capital employed is the amount of
money invested in a business.
The more money invested, the
larger the business
market share?
It is the percentage of an industry or market’s
total sales that is earned by a particular
company (or brand / product) over a specified
time period
Why some businesses stay small
Type of industry the business is in
-Industries offering personal service or
specialized products. They cannot grow bigger because they will lose the personal service demanded by customers.
Market size
-If the number of customers a business is selling to is too small, the business cannot expand.
Owners objectives
-Owners might want to keep a personal touch with staff and customers
