Business - objectives

NEED - is a good or service essential for living

WANT - is a good/service people would like to have, but which is not essential for living.

people's wants are unlimited (of course)

ECONOMIC PROBLEM - theres unlimited wants, but limited resources to produce goods & services to satisfy those wants.

FACTORS OF PRODUCTION - resources needed to prouduce goods/services. 4 factors of production & they are limited supply.

SCARCITY - is the lack of sufficient products to fulfil the total wants of the population.

the problem of shortage of goods and services is not money.
It's from having few factors of production aka resources of production.

LAND - used to cover all natural resources.
from nature. includes: fields, forests, oil, gas, metals & other mineral resources

LABOUR - the efforts of people needed to make products

CAPITAL - this is the finance, machinery & equipment needed for manufacture of goods

ENTERPRISE - the skill & risk-taking ability of person who brings other resources together to produce a good/service.
E.g: owner of business. aka entrepreneurs

we've seen that the factors of production are LIMITED.

this causes people to have to make a choice of what they really need.
we consider the other alternative when we choose

OPPORTUNITY COST is the next best alternative given up by choosing another item.

e.g choosing a holiday to hawaii rather than a shiny new car. (nice)
buying a new computer OR pay for a new advertising campaign?