Business Studies - CHAPTER 1
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10 Terms
Need
A good or service that is essential for people's living
Want
A good or service which people want to have, not essential
Economic problem
When wants exceed the resource available to make scarcity
Scarcity
when there are unlimited wants but limited resources
Factors of Production (4)
Land, labor, capital, enterprise
Opportunity cost
The next best alternative choice given up as another was chosen
Specialization
When workers specialize in one task which they do, best at
Division of labour
When labor force is divided into sections in which people at those sections are specialized in one particular job
Purpose of business activity
Combine 4 factors of production and make products/services
Added value
Selling price - cost of making products
