Why is business activity needed (summary) - Provides goods and services from limited resources to satisfy unlimited wants. - Scarcity results from limited resources and unlimited wants. - Choice is necessary for scarce resources.
Igcse Business Studies Notes Full View AndHAPPY READING Business Studies Notes (All in one) Click on the Pop-out button on the upper right corner of the pdf file to have full view and to download or download it HERE.Source: Biology Notes for IGCSE 2014 Biology Notes All in one Click on the Pop-out button on the upper right corner of the pdf file to have full view and to download or download it HERE. By chapters 1. Classification of living things or click Here to download 2. As a student, I would like to share with you my experience since I am studying this subject right now. I am not a professional so please feel free to add comments and suggestions on how I should improve. Needs are things we cant live without, while wants are simply our desires that we can live without. We all have unlimited wants, which is true, since all of us want a new PC, a car, new graphics card, etc. Businesses produce goods and services to satisfy needs and wants. Although we have unlimited wants, there are not enough resources for everyone. Labour: The effort of workers required to make a product or service. Capital: Finance, machinery and equipment required to make a product or service. Enterprise: Skill and risk-taking ability of the entrepreneur. Entrepreneurs are people who combine these factors of production to make a product. The economic problem results from limited resources and unlimited wants. This situation causes scarcity, when there are not enough goods to satisfy the wants for everybody. Because of this, we will have to choose which wants we will satisfy (that will be of more benefit to us) and which we will not when buying things. For any choice, you will have to would have obtained if you didnt spend that money. For example, you would have got a book if you didnt buy the pen, or you would have a burger if you didnt buy the chips. Make sure that the opportunity cost isnt higher than what you bought Opportunity cost: the next best alternative given up by choosing another item. Here is a diagram showing the whole economic problem: Division of labourSpecialisation Because there are limited resources, we need to use them the most efficient way possible. Therefore, we now use production methods that are as fast as possible and as efficient (costs less, earns more) as possible. The main production method that we are using nowadays is known as specialization, or division of labour. Division of LabourSpecialisation is when the production process is split up into different tasks and each specialized worker machine performs one of these tasks. Pros: Specialized workers are good at one task and increases efficiency and output. No flexibility because workers can only do one job and cannot do others well if needed. If one worker is absent and no-one can replace him, the production process stops. Why is business activity needed (summary) - Provides goods and services from limited resources to satisfy unlimited wants. Scarcity results from limited resources and unlimited wants. Choice is necessary for scarce resources.
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