1.1 Business Activity Flashcards
(16 cards)
Define a Need
a good or service essential for living.
Define a Want
a good or service that people would like to have, but is not required for living.
Define the Basic Economic Problem
When there are unlimited wants, but limited resources to satisfy, resulting in scarcity
Define Opportunity Cost
The next best alternative forgone by choosing something else
What are the four factors of production?
Land
Labour
Capital
Enterprise
What is scarcity?
A lack of a desired quantity caused by the economic problem
Define specialization
When a person or organisation concentrates on a task at which they are best at
What are two advantages of specialization?
- Increased efficiency
- Skill Development
Explain the advantage of Increased efficiency in specialization
Workers are trained to do a particular task and specialise in this, thus increasing efficiency
Explain the advantage of Skill Development in specialization
workers can develop their skills as they do the same tasks repeatedly, mastering it.
List 2 disadvantages of specialization
- Monotonous/Boring
- Over-Dependency
Explain the disadvantage of Montony in specialization
It can get monotonous/boring for workers, doing the same tasks repeatedly
Explain the disadvantage of Overdependency in specialization
if worker(s) responsible for a particular task is absent, the entire production process may halt since nobody else may be able to do the task.
What is the purpose of business activity?
Business is any organization that uses all the factors of production (resources) to create goods and services to satisfy human wants and needs.
Define Added Value
The difference between the cost of materials bought in and the selling price of the product
List 2 ways to increase added value
- Reducing cost of raw materials
- Increasing the selling prices
