Business Studies IGCSE CHAPTER 1

Business

Business Activity

The process of transforming inputs into outputs to satisfy consumer needs and wants. This includes production, marketing, and distribution of goods and services.

Economic problem

The fundamental issue of scarcity where resources are limited while human wants are unlimited, leading to choices about how to allocate resources efficiently.

Factors of Production

The resources used in the production of goods and services, typically classified into four categories: land, labor, capital, and entrepreneurship.

Opportunity Cost

The value of the next best alternative foregone when making a decision.

Specialisation

The process by which individuals or businesses focus on a specific task or production of a particular good to increase efficiency and productivity.

Division of Labour

The breakdown of production processes into smaller tasks, allowing workers to specialize in specific activities, thereby increasing efficiency.

Consumer goods

Goods that are purchased by consumers for personal use, such as clothing, food, and electronics.

Consumer Services

Services provided to consumers for personal use, such as healthcare, education, and entertainment.

Capital Goods

Goods used in the production of other goods, such as machinery, tools, and buildings.