Business Activity Flashcards
(17 cards)
Premises:
Buildings and land used by a shop or business.
Needs:
Basic requirements for human survival.
Wants:
People’s desires for goods and services.
Business:
An organisation that produces goods and services.
Goods:
Physical products such as mobile phones or a pair of shoes.
Services:
Non-physical products such as baking and car washing.
Consumer goods:
Sold to ordinary people rather than businesses. For example: smartphones, magazines, health care, education.
Producer goods:
Produced by one business for another. For example: delivery van, office furniture, insurance, software design.
Scarcity:
When there are not enough goods to satisfy the wants for everybody.
What causes scarcity?
The economic problem results from limited resources and unlimited wants and this leads to scarcity.
Opportunity cost:
The next best alternative given up by choosing another item.
Private enterprise:
Owned by individuals or groups of individuals and aim is to make profit. ( private sector )
Public enterprise:
These are owned by the government. (public sector)
Social enterprise:
These are non-profit making like charities.
Stakeholder:
An individual or group with an interest in the operation of a business.
Shareholder:
People who invest money in shares of the business.
Why business activity is needed (summary):
- Provides goods and services from limited resources to satisfy unlimited wants
- Scarcity is the result of the economic problem - limited resources and unlimited wants.
- Choice is necessary for scarce resources. This leads to opportunity costs.
- Specialization is required to make the most out of sources.
