Section 1: Understanding Business Activity

Needs
1. Wants
  1. People would like it, not essential for living
2. Essential to living, people need it
  1. Purpose of business activity
    1. Consumer goods
      1. Products sold to the final customer, can be seen and touched
    2. Consumer services
      1. Products sold to the public but cannot be seen or touched
    3. Capital goods
      1. Products sold to other businesses to help them in their production process, physical goods
        Adding value
        Branding
        Excellent service quality
        Product features
        Convenience
Business activity
1. Producing goods to satisfy customer demands
  1. Division of labour
    1. Production divided into separate tasks, each worker does one
Factors of production
1. Enterprise
  1. Entrepreneurs
2. Land
  1. Natural resources
3. Labour
  1. No. of people available
4. Capital
  1. Finance needed for production of goods and services
5. Economic problem
  1. Scarcity
    1. Opportunity cost
      1. Potential benefit from use of same resource
    2. Not enough goods or services for population
Specialisation
1. Concentration on what people are best at in business

Resource summary

	Created by William Howard over 9 years ago