Unit 1.1 Business Activity Flashcards
(12 cards)
1
Q
What is a Business?
A
- Organisation that uses the factors of production
- Create goods or services in order to satisfy customer wants and needs
- Goal is to make PROFIT
2
Q
Economic Problem
A
-Unlimited wants and needs but limited resources
- Because of SCARCITY
3
Q
Factors of Production
A
-Labour
- Land
- Capital
- Enterprise
4
Q
Why do you need to meet Customer needs?
A
- Builds customer loyalty
- Increase brand awareness
Leads to higher revenue
5
Q
Opportunity Cost
A
- The cost of the next best alternative
- By choosing another
6
Q
Specialisation
A
When people and businesses focus on a particular job they are best at
7
Q
Division of Labour
A
Separation of a work process into different tasks that are completed by a separate person or group
8
Q
Advantages of Division of Labour
A
- Workers trained in one task and specialise in it, leads to higher efficiency and output per worker
- Quicker and Cheaper to train workers because of fewer tasks to be taught
9
Q
Disadvantages of Division of Labour
A
- Workers become bored –> less efficiency
- If a worker is missing, production may be stopped –> no output
10
Q
Added Value
A
The difference between the selling price of a product and the cost of bought-in materials and components
11
Q
How to Add Value?
A
- Branding
- Improving quality
- Convenience
- Design
- Unique Selling point
12
Q
Why added value?
A
Allows businesses to charge higher selling prices
