1.1.1 Business Activity

Vocabularies

Consumers

people and organizations who are willing and able to buy goods and services

Factors of production

Capital, Land, Labour and Enterprise

Opportunity cost

The cost of the next best alternative product that you have given up as a result of a decision or choice.

Specialization

Focusing on producing on a single or limited range of products in order to make the best use of scarce resources.

Value added

The difference between the price of a produce and the cost of the natural and man-made materials that are used to make it

Land

All the natural resources provided by nature that are used to make goods and services.

Labour

The human effort — physically and mentally — in order to produce the goods and services

Capital

The man-made resources like machinery, computers and tools that are used to produce goods and services.

Enterprise

The knowledge and skill that a person have to run and organize the other 3 factors of production