Business - objectives

all the things about why there are business (wish they're wasn't) and the objectives and things.

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  • Created by: stuDYING
  • Created on: 08-01-10 14:23


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)

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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.

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4 factors of production

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

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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?

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