Business Chapter 1 - created from Mind Map

Page 1

Business- Any legal activity whose main aim is to earn profit

Needs- Goods or services that humans cannot live without

The Economic Problem- When there are unlimited wants but limited resources, resulting in scarcity

Specialisation and Division of Labour- When the work is divided up into a way that each worker gets the job theyre best at

Business Objectives

Factors of Production- Resources used to produce goods and services

TYPES OF FACTORS OF PRODUCTION

Land- It includes all natural resources e.g. oil

Labour the efforts of ppl needed to create the product

Capital- Human made resources

Enterprise- The one who combines all the above resources and ready to take risks

Wants- Goods or services humans would like to have, but can live without

Consumers The ones who buy the product to satisfy their needs or wants

Consumer Goods These goods end up being used up by consumers e.g. Food

Capital Goods- These goods are used to produce more goods and services e.g. Machinery

Consumer Services These goods are used up by consumers but cannot be seen or touched e.g. Banks

Adding Value- It is the difference between cost of material and price of finished good

How Adding Value can be increased

1. Branding

2. Service quality

3. Product features

Scarcity- When there is a lack in the sufficient goods to fulfil the total wants of the population

opportunity cost- The next best alternative given up by choice

Advantages

Disadvantages

1. The work is done fast

2. The work is done the right way

3. Less time is wasted

4. Work will be of high quality

1. Workers get bored of doing the same job

2. Workers feel allinated

3. Workers become too dependant on eachother

To make profit

To provide a service for the community

To achieve business survival

To increase Added Value

To expand the business