Public sectors:business activity owned financed and controlled by the state through government or local authorities
·Government – sets policy
·Local authorities – county Councils
·Hospitals – NHS (in UK you can treated for free)
·Public corporations –BBC (1460 RMB)
Non-profit making:a third type of enterprise, including charities and voluntary organisations. These art set up to fulfill a perceived social need or to provide help to a specific section of the community.
Deciding on what to produce:
Resources found on earth are finite or in limited supplies (e.g. crude oil, aluminate)
Managing scarce resources
Choice must be made.
Furniture & houses can be made from timber so a decision needs to be made. If they decide to build furniture instead of houses, then HOUSES are the opportunity cost.
(Opportunity cost - the next best alternative given up by choosing another item)
Factors of production
Land– includes all resources that occur naturally (crops, fish, coal)
Labour– effect of work provided by people
Capital– includes items used in the production of goods and services made by people.
Enterprise– the ability, skill and enthusiasm to take risks involved in developing a business idea and gathering appropriate resources.
·Labour-intensive production can often be found in many developing countries. Labour-intensive production means labour is plentiful and relatively cheap compared with the technology available to do the job. (farming, manufacturing etc.) <China and India>
· Capital includes, buildings, machinery, equipment, finance required to purchase these items
*Capital-intensive is production uses a high proportion of capital compared to labour. It is cheaper and more efficient production using the latest technology than by hand (labour-intensive).