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Description
Flashcards by Johan Wilken, updated more than 1 year ago
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Created by Johan Wilken
over 7 years ago
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| Question | Answer |
| What is the Economic Problem ? | The Economic Problem: People have unlimited wants and needs but limited factors of production which creates Scarcity |
| What is opportunity cost ? | Opportunity cost is the next best alternative given up by choosing another item. It is what you gave up to fulfil another choice. |
| What is Specialisation ? | Specialisation occours when people and businesses concentrate on what they are best at |
| Explain what is meant by the Division of labour. | The devision of labour is when the production process is split up into different tasks and each worker performs one of these tasks. It is a form of Specialisation |
| What are the Advantages of the Devision of labour ? | ♧Workers are trained in one task and specialises in this - this increases Efficiency and output ♧Less time is wasted moving from one area of production to the other... |
| What are the Disadvantages of The devision of labour? | ♢Workers can become bored doing just one job- Efficiency might fall ♢If one worker is absent and no one else can do the job , production might be stopped |
| What is meant by Business ? | The purpose of business is combining factors of production to produce goods or services which fulfil people's wants and needs |
| What is meant by Added value ? | ♤Added value is the difference between the selling price of a product and the cost of baught materials and components... It is the increase of worth of the materials you acquired to produce a good or service. |
| How could a business increase Added Value ? | }Increase selling price but keep the cost of materials the same }Reduce cost of materials but keep the price the same |
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