Untitled Deck Flashcards
(20 cards)
What is a Need?
A good or service essential for living.
Example: water, food, shelter, etc.
What is a Want?
A good or service which people would like to have, but which is not essential for living.
What is the Economic Problem?
The existence of unlimited wants but limited resources to produce goods and services to satisfy those wants.
What is Scarcity?
The lack of sufficient products to fulfill the total wants of the population.
What is Opportunity Cost?
The next best alternative given up by choosing another item.
What is Specialisation?
When people and businesses concentrate on what they are best at.
What is Division of Labour?
When the production process is split up into different tasks and each worker performs one of these tasks.
What do Businesses do?
Combine factors of production to make products (goods and services) that satisfy people’s wants.
What is Added Value?
The difference between the selling price of a product and the cost of bought-in materials and components.
What are the four Factors of Production?
Land, Labour, Capital, and Enterprise.
What does Land refer to in Factors of Production?
All natural resources provided by nature, including fields, forests, oil, gas, metals, and other minerals.
What does Labour refer to in Factors of Production?
The number of people available to make products.
What does Capital refer to in Factors of Production?
The finance, machinery, and equipment needed for the manufacture of goods.
What does Enterprise refer to in Factors of Production?
The skill and risk-taking ability of the person who combines the other resources to produce a good or service.
What is the real cause of the Economic Problem?
Too few factors of production.
What does Unlimited wants + Limited resources equal?
Scarcity.
What are the advantages of Division of Labour?
Increased efficiency and productivity.
What are Business Objectives?
The aims or targets that a business works toward.
Why is Business Activity needed?
To combine scarce resources to produce goods and services and employ people.
How can a business increase Added Value?
By increasing price, reducing cost of materials, changing packaging, improving design, or adding extra features.
