Business Activity
Economic Problem
SPecialsation
Added value
Business Ownership
Enterprise,business growth,Size
Business plan
7/9/21
Economic problem(Scarcity)
Too many wants and needs
Limited resources
This forces choices to be made
What to produce How to produce For Whom to produce for
Opportunity cost: The cost of the next best alternative foregone when a choice is made, to
give a thing to get a better one.
Scarcity-> choice-> opportunity cost
The government has a limited amount of money (scarcity) and must decide on
whether to use it to build a road, or construct a hospital (choice). The government
chooses to construct the hospital instead of the road. The opportunity cost here are
the benefits from the road that they have sacrificed (opportunity cost).
CELL
Capital - access that they have to enter a machine or goods
Enterprise - risk taking individuals who bring the factor of production together to produce
goods and services.
Labour- mental effort putting by worker or employees when producing goods
Land - The natural resources that can be obtained by nature(raw materials)
Purpose of business activity
Business is any organisation that uses all the factors of production (resources) to
create goods and services to satisfy human wants and needs. Solve the problem of
scarcity.
Entrepreneurship
Enterprise: ( they might lose money from investment, there is no demand for that goods, they
might went into debts)
How to reduce the risk: Plan before you invest, set a budget, market research, seek advice,
don't put all your money in a single investment)
A leaders and problem solver can be a individual for a enterprise
,Downside: Financial pressure, higher stress level, needs to multi-tasking
Reward: Profits, capital gains, self-esteem
Characteristic
Hard working: Long hours and short holidays are typical for many entrepreneurs to make
their business successful
Optimistic:Looking forward to a better future is essential-if you think of failure, you will fall
Effective Talking:clearly and confidently to bank, other leaders and consumers
Risk taker - A risk taker takes risk to invest anything
Creative- An entrepreneur is creative she develops a new business idea to market
Self-confident- An entrepreneur is self-confident because they have to believe that their
business idea will succeed.
Innovative -An entrepreneur is innovative because they always design new product e.g. a
smart service which they sell to customers.
Independent- An entrepreneur is independent they usually work by themselves when starting
up their business
Labour
Specialisation: The concentration of a worker, firm(business man) or country on producing a
narrow range of goods and services. Tasks are finished by people who are skilled and
experienced on it.
Specialisation leads to increased output, which leads to increase of revenue( your income)
and increase in profit.
Specialization leads to skill development, workers can develop and master their skills by
doing the same work again and again.
Specialization may lead to lower cost in production.
Specialisation leads to increasing their risk, if the product that they sell becomes out of
fashion and customers do not want to buy it any more, the businesses will lose a large
amount of their revenue.
, Profit= Revenue - cost
Economies of scale:Advantage of increasing the revenue
1.Purchasing/buying
2.Marketing
3.Techniques
4.Financial
POINT
IMPACT
EXPLAIN
Because
Lead to
Therefore
Added value
Selling price- cost of input
The difference between the price of the finished product and the cost of the inputs(Bought-in
Cost) involved in making it.
Businesses want to add value to their product so that they can earn more profit and increase
their revenue.
Product sell price=$13
Cost=$5
13-5=$8(Added value)
Ways to increase added value
● Reduce the cost of production
Lower cost of production, cheap labour, raw materials etc
● Raising price
Unique selling point(USP)
What makes your product different and separate from others, making someone want to buy
your product.
Feature/ benefits will make the product unique
Source of Added value
Speedy service
Economic Problem
SPecialsation
Added value
Business Ownership
Enterprise,business growth,Size
Business plan
7/9/21
Economic problem(Scarcity)
Too many wants and needs
Limited resources
This forces choices to be made
What to produce How to produce For Whom to produce for
Opportunity cost: The cost of the next best alternative foregone when a choice is made, to
give a thing to get a better one.
Scarcity-> choice-> opportunity cost
The government has a limited amount of money (scarcity) and must decide on
whether to use it to build a road, or construct a hospital (choice). The government
chooses to construct the hospital instead of the road. The opportunity cost here are
the benefits from the road that they have sacrificed (opportunity cost).
CELL
Capital - access that they have to enter a machine or goods
Enterprise - risk taking individuals who bring the factor of production together to produce
goods and services.
Labour- mental effort putting by worker or employees when producing goods
Land - The natural resources that can be obtained by nature(raw materials)
Purpose of business activity
Business is any organisation that uses all the factors of production (resources) to
create goods and services to satisfy human wants and needs. Solve the problem of
scarcity.
Entrepreneurship
Enterprise: ( they might lose money from investment, there is no demand for that goods, they
might went into debts)
How to reduce the risk: Plan before you invest, set a budget, market research, seek advice,
don't put all your money in a single investment)
A leaders and problem solver can be a individual for a enterprise
,Downside: Financial pressure, higher stress level, needs to multi-tasking
Reward: Profits, capital gains, self-esteem
Characteristic
Hard working: Long hours and short holidays are typical for many entrepreneurs to make
their business successful
Optimistic:Looking forward to a better future is essential-if you think of failure, you will fall
Effective Talking:clearly and confidently to bank, other leaders and consumers
Risk taker - A risk taker takes risk to invest anything
Creative- An entrepreneur is creative she develops a new business idea to market
Self-confident- An entrepreneur is self-confident because they have to believe that their
business idea will succeed.
Innovative -An entrepreneur is innovative because they always design new product e.g. a
smart service which they sell to customers.
Independent- An entrepreneur is independent they usually work by themselves when starting
up their business
Labour
Specialisation: The concentration of a worker, firm(business man) or country on producing a
narrow range of goods and services. Tasks are finished by people who are skilled and
experienced on it.
Specialisation leads to increased output, which leads to increase of revenue( your income)
and increase in profit.
Specialization leads to skill development, workers can develop and master their skills by
doing the same work again and again.
Specialization may lead to lower cost in production.
Specialisation leads to increasing their risk, if the product that they sell becomes out of
fashion and customers do not want to buy it any more, the businesses will lose a large
amount of their revenue.
, Profit= Revenue - cost
Economies of scale:Advantage of increasing the revenue
1.Purchasing/buying
2.Marketing
3.Techniques
4.Financial
POINT
IMPACT
EXPLAIN
Because
Lead to
Therefore
Added value
Selling price- cost of input
The difference between the price of the finished product and the cost of the inputs(Bought-in
Cost) involved in making it.
Businesses want to add value to their product so that they can earn more profit and increase
their revenue.
Product sell price=$13
Cost=$5
13-5=$8(Added value)
Ways to increase added value
● Reduce the cost of production
Lower cost of production, cheap labour, raw materials etc
● Raising price
Unique selling point(USP)
What makes your product different and separate from others, making someone want to buy
your product.
Feature/ benefits will make the product unique
Source of Added value
Speedy service
