IGCSE Business Studies – Terms and definitions
SECTION 1 – UNDERSTANDING BUSINESS ACTIVITY
Need - A good or service that is essential for living.
Want - A good or service that people would like to have but is not necessary for
living. People have unlimited wants.
Economic problem - There are unlimited wants but limited resources to produce
the goods and services to satisfy wants. This creates scarcity.
Factors of production - Resources needed to produce goods and services. There
are 4 factors of production (land, labour, capital, enterprise) and they are limited
in supply.
Scarcity - The lack of sufficient products to fulfill the total wants of the
population.
Opportunity Cost
The next best alternative given up by choosing another item.
Specialization
When people and businesses concentrate on what they are best at.
Division of labor
When the production process is split up into different tasks and each worker
performs one of these tasks. It is a form of specialisation.
Business
Combines factors of production to make products (goods and services), which
satisfy people's wants.
SECTION 1 – UNDERSTANDING BUSINESS ACTIVITY
Need - A good or service that is essential for living.
Want - A good or service that people would like to have but is not necessary for
living. People have unlimited wants.
Economic problem - There are unlimited wants but limited resources to produce
the goods and services to satisfy wants. This creates scarcity.
Factors of production - Resources needed to produce goods and services. There
are 4 factors of production (land, labour, capital, enterprise) and they are limited
in supply.
Scarcity - The lack of sufficient products to fulfill the total wants of the
population.
Opportunity Cost
The next best alternative given up by choosing another item.
Specialization
When people and businesses concentrate on what they are best at.
Division of labor
When the production process is split up into different tasks and each worker
performs one of these tasks. It is a form of specialisation.
Business
Combines factors of production to make products (goods and services), which
satisfy people's wants.
