Business Studies Yr 9 intro

This is for O level/IGCSE Business Studies

cause of the economic problem

unlimited wants + limited resources = scarcity

opportunity cost

next best alternative forgone

advantages of division of labour

workers are trained in one task and therefore are more skilled, less time is wasted and training is cheaper

disadvantages of division of labour

• the absence of workers may lead to production delays

• workers can be bored and it leads to drops in productivity due to job dissatisfaction

business activity

Combining limited resources to produce goods and services while employing labor.

added value

selling price - cost price

how to increase added value

reduce costs or increase price

primary sector

extraction and production of natural resources

secondary sector

the secondary sector involves the manufacturing and industrial processes that transform raw materials obtained from the primary sector into finished goods

tertiary sector

The tertiary sector is the segment of the economy that provides services rather than goods. e.g.:

-retail

-wholesale

-transportation

-hospitality

-healthcare

-finance

-education

-entertainment

-etc.

relative importance of economic sectors

percentage of the countries total workers in each sector / value of output of each sector as a percentage of the countries total output

benefits of being an entrepreneur

larger profits compared to working as an employee, personal fame and recognition, independence and ability to use own skills

disadvantages of being an entrepreneur

risk, lack of capital and knowledge and opportunity cost of being an employee

characteristics of successful entrepreneurs

hard working, risk taking, creative, optimistic, confident, innovative, independent and effective communicator

business plan

a written document that provides a description and overview of your companies future

contents of a business plan

description of business and product/service, target market, business location, management, financial information, cashflow forecast, business strategy, etc.

use of a business plan

helps gain capital and reduces risk through careful planning