Business activity Chapter one 0.0 / 5 ? Business Studieschapter oneIGCSECIE Created by: raniaamirCreated on: 10-04-17 13:03 what is a need? it is a good or service essential for living. 1 of 18 what is a want? is a good or a service which people would like to have, but which is not essential for living. People's wants are unlimited. 2 of 18 what is the economic problem? there exists unlimited wants but limited resources to produce goods and services which satisfy the people. 3 of 18 what are the factors of production? Land, labour, capital and enterprise 4 of 18 what does factors of production mean? are those resources needed to produce goods and services. They are limited in supply 5 of 18 what is scarcity? is the lack of sufficient products to fulfil the total wants of the population. 6 of 18 what is the opportunity cost? it is the next best alternative given up by choosing another item. 7 of 18 examples of opportunity cost? New road or new school? The government chooses the roads so the school becomes the opportunity cost. 8 of 18 what is specialisation? occurs when businesses and people focus on what they're best at. 9 of 18 why is specialisation very common? specialised machinery and technology are widely available. increasing competition. 10 of 18 what is division of labour? when the production is spilt into different tasks and each worker performs it/ 11 of 18 advantages of DOL? workers trained in one task. increases efficiency of output. less time wasted. 12 of 18 disadvantages of DOL? workers become bored. if one absent, no one else can do the job. 13 of 18 what is a business? to combine the factors of production and produce a good or service which will satisfy the customers wants. 14 of 18 what is the purpose of business activity? combine scarce factors. produce goods and services. employ workers 15 of 18 what is added value? difference between the selling price of product and cost of bought materials and components. 16 of 18 why is added value important? can pay other costs. may be able to make profit. 17 of 18 how could a business increase added value? increase selling price but keep costs of material the same or reduce cost of material and keep price the same. 18 of 18
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