A good or service essential for living. Needs are limited. For example; food, cloth, shelter, water etc
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Want
A desire or wish to have goods or services which are not essential for living. Wants are unlimited. For example; cars, ornaments, laptop etc
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Economic Problem
Occurs when limited resources to satisfy unlimited wants. Economic problems are of 3 types. They are scarcity, factors of production and opportunity cost.
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Scarcity
Lack of resources to satisfy human wants.
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Factors of Production
4 factors which are essential for the production of goods and services. They are land, labour, capital & enterprise.
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Land
Natural resources that can be used for production. For example; water, forest, river, air etc
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Labour
Any physical or mental effort required for the production of goods or services. For example; carpenter, plumber, doctor, teacher etc
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Capital
Man made resources used for production. e.g; money, machinery, factory, tools, equipment etc
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Enterprise
A risk taking person or firm who organises all 3 factors of production to produce goods or services. For example; Toyota, BMW etc
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Opportunity Cost
The next best alternative forgone. For example; pen for pencil, coffee for tea etc
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Division of Labour
When the entire production process is split into different tasks and each worker performs one of these tasks. For example; Batch production.
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Business
Combines all the 4 factors of production to make goods or services which satisfy human wants.
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Business Activity
Provides goods and services by combining factors of production.
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Business Objectives
The aims or targets that a business works towards. They are Profit, Growth, Value added, Business Survival and Service to the Community.
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Value Added
The difference between selling price of a product and the cost of its input [ raw materials and components].
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Profit
The difference between sales revenue and total cost of production.
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Stakeholder
A group or a person who has direct or indirect interest in the performance and activities of a business. They are owners, consumers, managers, workers, govt, community/society.
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Shareholder
The owner of a limited company; they have bought shares which represent part ownership of a company. For e.g Fidelity Management is the largest shareholder of Apple computer company. Government and economic influences on business
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Other cards in this set
Card 2
Front
A desire or wish to have goods or services which are not essential for living. Wants are unlimited. For example; cars, ornaments, laptop etc
Back
Want
Card 3
Front
Occurs when limited resources to satisfy unlimited wants. Economic problems are of 3 types. They are scarcity, factors of production and opportunity cost.
Back
Card 4
Front
Lack of resources to satisfy human wants.
Back
Card 5
Front
4 factors which are essential for the production of goods and services. They are land, labour, capital & enterprise.
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