Business Studies - CHAPTER 1

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IGCSE Business Studies

CIE

Understanding business activitiy

9th

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10 Terms

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Need

A good or service that is essential for people's living

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Want

A good or service which people want to have, not essential

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Economic problem

When wants exceed the resource available to make scarcity

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Scarcity

when there are unlimited wants but limited resources

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Factors of Production (4)

Land, labor, capital, enterprise

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Opportunity cost

The next best alternative choice given up as another was chosen

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Specialization

When workers specialize in one task which they do, best at

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Division of labour

When labor force is divided into sections in which people at those sections are specialized in one particular job

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Purpose of business activity

Combine 4 factors of production and make products/services

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Added value

Selling price - cost of making products