Summary Cambridge IGCSE and O level Business Studies (7115) Ch#1

BUSINESS STUDIES (7115)
CH#1
BUSINESS ACTIVITY
 Need: a good or service essential for living- limited in
supply
 Want: a good or service which people would like to have but
not essential for living
 Economic problem: when there are not enough resources
to fulfill/ satisfy peoples wants-gives birth to scarcity and
opportunity costs
 Factors of production: the resources that are needed to
produce goods and services- are in limited supply
 Land: covers all the natural resources including what’s
found in them e.g. mines and fish
 Labor: the people available to make products
 Capital: finance, machinery and equipment available for
use
 Enterprise: the person who has the skill and risk taking
ability to combine the factors of production to produce a
good or service-entrepreneur
 Scarcity: the lack of sufficient products to fulfill peoples
wants- opportunity costs (have to make choices)
 Opportunity cost: the next best alternative forgone
Factors of production

Land, labor, capital, enterprise




Unlimited Limited
Scarcity
wants Resource
s
Opportunit
y
costs