IGCSE Business Studies Section 1 - Definitions

Front

What is a need?

Back

A good or service essential for living.

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What is a want?

Back

A good or service which people would like to have but which is not essential for living.

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What is the economic problem?

Back

There exist unlimited wants but limited resources to produce the goods and services to satisfy those wants, creating scarcity.

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What are the factors of production?

Back

Resources needed to produce goods and services, which are in limited supply.

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What is scarcity?

Back

The lack of sufficient products to fulfill the total wants of the population.

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What is opportunity cost?

Back

The next best alternative given up by choosing another item.

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What is specialization?

Back

When people and businesses concentrate on what they are best at.

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What is division of labour?

Back

When the production process is split up into different tasks and each worker performs one of those tasks.

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What is added value?

Back

The difference between the selling price and the cost of bought-in materials and components.

Front

What does the primary sector of industry do?

Back

Extracts and uses the natural resources of Earth to produce raw materials.