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Title: Understanding the business activity - part 1
Description: This is a collection of first part of 'Understanding Business Activity' chapter. This is a summary of the purpose and nature of business activity. The notes give a summarized explanation of the concept of needs, wants, scarcity and opportunity cost.; the 4 factors of production, and the development of economic activity and the use of specialization. The advantages and disadvantages are also discussed to provide a basic understanding of what the term 'specialization' means. Finally, the notes provide a brief knowledge to what the purpose of business activity is; it also defines what the term 'added value' means making it easier to understand the concept of it. This collection of notes consists of definitions and explanations in point forms allowing the reader to understand the chapter easier. Words and phrases that are typed in bold are the key terms or important terms that need to be remembered during revision and when writing answers in the exam. Writing notes can be really helpful, especially during last-minute revisions. These are the notes that i used for my finals which resulted in me getting a Grade A.
Description: This is a collection of first part of 'Understanding Business Activity' chapter. This is a summary of the purpose and nature of business activity. The notes give a summarized explanation of the concept of needs, wants, scarcity and opportunity cost.; the 4 factors of production, and the development of economic activity and the use of specialization. The advantages and disadvantages are also discussed to provide a basic understanding of what the term 'specialization' means. Finally, the notes provide a brief knowledge to what the purpose of business activity is; it also defines what the term 'added value' means making it easier to understand the concept of it. This collection of notes consists of definitions and explanations in point forms allowing the reader to understand the chapter easier. Words and phrases that are typed in bold are the key terms or important terms that need to be remembered during revision and when writing answers in the exam. Writing notes can be really helpful, especially during last-minute revisions. These are the notes that i used for my finals which resulted in me getting a Grade A.
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Chapter 1:
Business activity
1
...
Needs are things we can’t live without / a need is a good or service that is
essential in our daily life
...
We
have unlimited wants,
Businesses produce goods and services to satisfy our needs and wants
...
Unlimited wants + limited resources = the economic problem
The economic problem leads to scarcity (the lack of sufficient products to fulfill
the total wants of the population)
...
Resources can be split into 4 factors of production, which are:
Land: all natural resources provided by nature that are used to make a product or
service
...
Capital: finance, machinery and equipment required to make a product or
service
...
Division of labour / specialization
∆
∆
∞
∞
Division of labour is when the production process is split up into different tasks
and each specialized worker/machine performs one of each tasks
...
Advantages
Specialized workers are very skilled
at one task and increases efficiency
and output
...
Disadvantages
∞ Workers may get bored from
doing the same job - lowers
efficiency
...
∞ Absence of one worker may
result in stopping the production
process
...
Scarcity results from limited resources and unlimited wants
...
This leads to opportunity costs
...
Business activity:
Combine factors of production to create goods and services
...
Employs people and pays them wages so they can consume other products
...
The most common objectives are:
I
...
Provide finance for further investment in business
...
II
...
To increase the salaries and the status of managers as the business expands
...
To obtain a higher market share
...
III
...
Therefore,
businesses need to focus on this objective the most when they are:
Starting up a business
...
In an economic recession
...
Service to the community : this is the primary goal for most government-owned
businesses
...
Social enterprise - to provide jobs and support to the public
...
Market share : the proportion of the total market share achieved by a business
Formula: Market share = (Company sales ÷ Total market sales) × 100
Stakeholders
A person or a group which has interest in a business for various reasons and will
be directly affected by its decisions
...
There are 6 types of stakeholders, and these types can be classified into two groups
with similar interests
...
∆ Growth, increase in value of business
...
∆ Job security
...
Managers:
∆ High salaries
...
∆ Growth of business so they get more power, status and salary
...
∆ High quality
...
∆ Reliability of service and maintenance
...
∆ Taxes
...
Community:
∆ Employment
...
∆ Business does not pollute the environment
...
Title: Understanding the business activity - part 1
Description: This is a collection of first part of 'Understanding Business Activity' chapter. This is a summary of the purpose and nature of business activity. The notes give a summarized explanation of the concept of needs, wants, scarcity and opportunity cost.; the 4 factors of production, and the development of economic activity and the use of specialization. The advantages and disadvantages are also discussed to provide a basic understanding of what the term 'specialization' means. Finally, the notes provide a brief knowledge to what the purpose of business activity is; it also defines what the term 'added value' means making it easier to understand the concept of it. This collection of notes consists of definitions and explanations in point forms allowing the reader to understand the chapter easier. Words and phrases that are typed in bold are the key terms or important terms that need to be remembered during revision and when writing answers in the exam. Writing notes can be really helpful, especially during last-minute revisions. These are the notes that i used for my finals which resulted in me getting a Grade A.
Description: This is a collection of first part of 'Understanding Business Activity' chapter. This is a summary of the purpose and nature of business activity. The notes give a summarized explanation of the concept of needs, wants, scarcity and opportunity cost.; the 4 factors of production, and the development of economic activity and the use of specialization. The advantages and disadvantages are also discussed to provide a basic understanding of what the term 'specialization' means. Finally, the notes provide a brief knowledge to what the purpose of business activity is; it also defines what the term 'added value' means making it easier to understand the concept of it. This collection of notes consists of definitions and explanations in point forms allowing the reader to understand the chapter easier. Words and phrases that are typed in bold are the key terms or important terms that need to be remembered during revision and when writing answers in the exam. Writing notes can be really helpful, especially during last-minute revisions. These are the notes that i used for my finals which resulted in me getting a Grade A.