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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 labor
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
Primary sector
Where people extract natural resources from earth and turn them into raw materials
Secondary sector
Turn raw materials into products
Tertiary sector
Provide services to customers and sell products
De-industrialization
Decline of importance for secondary sector
Mixed economy
Has private and public sector businesses
Capital
Money (invested into a business)
Note 
Flashcard (24)