business lessson 1(business activity)

What are Factors of Production

The resources used to produce goods and services, typically categorized into land, labor, capital, and entrepreneurship.

What is Added Value

The difference between the selling price and the initial cost of production /manufacturing cost it takes to make the product

Formula for Added Value

Added Value = Selling Price - Cost of production/manufactor.

Ways a Business Can Add Value

1. improving quality of product

2. Unique features

3. Branding

4. Convenience

5. Customer service

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

What are the 4 factors of production

Land,labor,capital,enterprise

What are the rewards of the 4 factors

Land-rent

Labour-wages/salery

Capital-interest

Enterprise-profit

What is the meaning of land

• All natural resources used in the creation of products.

• Examples: Raw materials, water, oil, timber, and the physical land itself where a factory is built.

What is the meaning of labour

• The human physical and mental effort used during the production process.

• Examples: Factory workers, shop assistants, managers, and office staff.

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What is the meaning of capital

• Man-made goods used to help produce other goods and services, rather than being consumed directly.

• Examples: Machinery, tools, computers, delivery vans, and factory buildings.

What is the meaning of enterprise

• The skill and risk-taking ability of an entrepreneur who brings the other three factors together to make a profit.

• Examples: A business owner starting a new tech company or opening a local restaurant.