Business

Needs

A good or service essential for living

Wants

A good or service that's not essential for living but you would like to have

Basic Economic problem

Unlimited wants but limited resources

Factors of production (define)

Resources needed to produce goods or services

Scarcity

Lack of sufficient products to fulfil the wants of the total population

4 factors of production

• Land

• Labour

• Capital

• Enterprise

Opportunity cost

The next best alternative forgone

Specialisation

Concentrate on what they're best at

Division of labor

When the production process is split up into different tasks among members

Advantages of specialization

• Increase efficiency and output

• Less time being wasted

• Cheaper to train workers (cus emme bayeh dhaskohdheythy

Disadvantages of specialization

• Repetitive work could lead to boredom

• Motivation may fall

• Increase training costs

Added value

Difference between the selling price of a product and the cost of production

Advantages of added value

• Help make profit

• Help pay expenses

Disadvantages of added value

Increase prices could lead to low demand

How could a business increase added value

• Increase selling price

• Reduce material costs

Mixed Economy