Notesale: Turn your study into money

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THEME 1: COMMERCIAL OPERATIONSTOPIC 1- PRODUCTION AND THE FACTORS
OF PRODUCTION
PRODUCTION AND THE FACTORS OF PRODUCTION
Production is the process of converting resources into goods and services with the
intention of fulfilling the needs and wants of people
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• Consumer goods are the goods produced in order to be consumed by the
final consumers to fulfill their needs and wants, ex’s: Food and clothing
• Intermediate goods are the components produced in order to be used by
other businesses and manufacturers, ex’s: Sugar, nuts, bolts and wires
• Capital goods are the goods used in the production of other products and
goods, Capital goods may include machinery, tools and equipment
THE PROVISION AND DELIVERY OF SERVICES
Direct services are personal services and they are aimed to be provided directly to
consumers/ customers
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Commercial services are divided into two categories known as trade and aids to
trade
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Trade includes export agencies, import agencies and retailing
Domestic trade is carried out by wholesalers and retailers whereas international
trade is done by exporters and importers
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…
Timber
Oil
Natural gas

Labor includes the workforce that uses their mental and physical power to
produce goods and services in an economy
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Capital is known as to be an artificial resource as it is produced by labor, Capital is
divided into two types known as Working capital or circulating capital and Fixed
capital
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Fixed Capital refers to assets such as factories, shops, tools, equipment and
furniture used in production
Entrepreneurs are the individuals responsible for setting up and running a
business
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