Business Choices Flashcards
1
Q
What choices do businesses make?
A
- What they want to produce/ supply (goods or services)
- How they want to produce/ supply (production)
2
Q
What choices do customers make?
A
What they want to buy based on their wants and needs
3
Q
Business scarce resources
A
- Time
- Finance (cash)
- Capacity/ equipment
- Skills and capabilities
4
Q
Scarce resource: Cash
A
Access: No track records impedes access to bank financing
Investment: High up-front fixed cots (equipment)
Delays in getting revenues: Time conflicts, overseas cash repatriation
5
Q
Scarce resource: Skills/ Labour
A
Recruiting the right talent: - Geography, culture, education - Economic cycle - Legislation - Competition - Business type/ culture Retaining staff: - Pressured staff - Salaries level - Benefits
6
Q
Scarce resources: Time
A
Human work time limited - Everyone is different Yet tools to organise time and communicate simultaneously have multiplied - Messaging, scheduling applications - Tablets, smartphones, teleconferencing
7
Q
What is an opportunity cost?
A
An opportunity cost is the benefit lost of the next best alternative
8
Q
What is a trade off?
A
A trade off is accepting less of one thing to achieve more of another
9
Q
How to minimise opportunity cost?
A
- Estimate revenues
- Estimate impact of shareholders
- Estimate costs
10
Q
Why are opportunity costs good?
A
- Weighing our OC allows the business to make the best possible decisions
- Enhance the decision- making process
