Unit 1: Business Activity key terms

_______ and _______ we need to survive.

• Goods and services
• need and wants

• chocolates and sweets

• milk and honey

What is Opportunity cost?

• Cost of capital

• The opportunity that costs you the most

• The value of the next-best alternative when a decision is made

Purpose of Business Activity

• Business satisfies consumers wants

• Maximize profits

• Franchise

• Expand into different countries

Scarcity

• Not enough resources, goods or services to provide for consumers unlimited wants

• Not enough resources, goods or services to provide for consumers unlimited needs

Specialisation

• The separation of a work process into a number of tasks

• Someone who controls all aspects of the operation at hand

• People in business focus on what they do best

• An extremely rare and special talent

Value Added

• Goods + Services = Value added

• Selling price - cost of bought-in materials

• The value the consumer pays for a good or service

• All FOP added together

Wants

• Good or service people want but are essential for survival

• Good or service people want but aren’t essential for survival

Primary Sector

• Manufacturing goods from raw materials

• Using natural resources to make raw materials for business Private Sector, Part of the economy owned and controlled by private individuals Secondary Sector, Manufacturing goods from raw materials

• Part of the economy owned and controlled by private individuals

• A business that provides services to consumers and other businesses

Private Sector

• Part of the economy owned and controlled by private individuals

• Using natural resources to make raw materials for business Private Sector

• Manufacturing goods from raw materials

• A business that provides services to consumers and other businesses

Secondary Sector

• Part of the economy owned and controlled by private individuals Secondary Sector, Manufacturing goods from raw materials

• Part of the economy owned and controlled by private individuals

• A business that provides services to consumers and other businesses

• Manufacturing goods from raw materials