Ch.1- Business Activity Flashcards
Business Activity
The process of producing goods and services to satisfy consumer demand
Need
A good or service which is essential to living
Want
A good or service which people would like, but is not essential for living.
Economic problem
The basic problem of scarcity; unlimited wants cannot be met because there are limited factors of production.
Factors of production
The resources needed to produce goods and services- land, labour, capital and enterprise.
Scarcity
There are not enough goods and services to meet the wants of the population.
Opportunity cost
The benefit that could have been gained from an alternative use of the same resource.
Specialisation
People and businesses concentrate on what they are best at.
Division of labour
Production is divided into separate tasks and each employee does just one of those tasks.
Consumer goods
Products which are sold to the final consumer. They can be seen and touched.
Consumer services
Non-tangible products such as insurance services, transport.
Capital goods
Physical goods, such as machinery and delivery vehicles, used by other businesses to help produce other goods and services.