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This textbook chapter discusses key concepts in understanding business activity, including: - Humans have basic needs and unlimited wants due to scarcity of resources. - Businesses produce goods and services using factors of production like land, labor, capital and enterprise. - Specialization and division of labor allow businesses to use resources efficiently. - Adding value is the increase in worth a business creates for a product, which can be increased through innovation, quality improvements, branding, and other means.

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42 views

BusinessActivity Encrypted

This textbook chapter discusses key concepts in understanding business activity, including: - Humans have basic needs and unlimited wants due to scarcity of resources. - Businesses produce goods and services using factors of production like land, labor, capital and enterprise. - Specialization and division of labor allow businesses to use resources efficiently. - Adding value is the increase in worth a business creates for a product, which can be increased through innovation, quality improvements, branding, and other means.

Uploaded by

03005671441
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

BUSINESS ACTIVITY

Understanding business activity

Textbook, Chapter 1 [pg 2-5]

Name:

Class:

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 1


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity
The purpose and nature of business activity:
Concepts of needs, wants, scarcity and opportunity cost

Importance of specialisation

Purpose of business activity

The concept of adding value and how added value can be increased

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 2


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity


Needs and Wants
In Business Studies we talk about basic human n_______and w _______.

Basic human needs such as ____________, _______________,

______________, ___________ and _______________

Human needs are un ___________. A basic want is the desire to


consume goods and services. Wants are unlimited because there is no
limit to the amount of goods and services people would like to consume.

Key points:
Human needs :
___________________________________________________________

Human wants :
___________________________________________________________
___________________________________________________________
___________________________________________________________

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 3


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity


Economic Problems
We cannot have everything we want: We have to make c______. This is
because resources are s ________: there are not enough for all the things
we would like to do. Therefore, we have to decide which wants we will
satisfy and those which we will not. All choices involve giving something
up and this is called o____________ c_______.

The real cause of the economic problem is because un_______ wants,


but limited resources.

Key points:

Scarcity :
___________________________________________________________
___________________________________________________________
___________________________________________________________
Opportunity cost :
___________________________________________________________
___________________________________________________________
___________________________________________________________

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 4


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity


Factors of Production
To produce something a business must normally use resources. This
resources are to refered to as r________ m___________ of the
f_________ of p_____________.
Factors of production are to be categorized into 4 main groups:
a) Land

___________________________________________________________

b) Labour

___________________________________________________________

c) Capital

___________________________________________________________

d) Enterprise

___________________________________________________________

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 5


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity


Specialisation/ Division of Labour
It is important to use resources in the most efficient ways.
Machinery is now more widely used.
Larger firms aften employ workers skilled in particular tasks.

Key points:

Division of labour :
___________________________________________________________
___________________________________________________________
___________________________________________________________

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 6


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Understanding Business Activity


Adding value and how it can be increased

What is added value?


The i_____________ worth that a business creates for a product. It is the
difference between what a business p______ for the product and the price that
is able to charge for the product/service.

How can we increase added value?


1. _______________________
2. _______________________
3. _______________________
4. _______________________
5. _______________________
6. _______________________

Group work
5 students in a group
Design one of the following with a unique selling proposition
- Mobile phone
- Car
- Football boots

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 7


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

Homework 1 (Due date: _________) Marks: __________ (4%)


Identify two reasons why value added is important for a business? [4m]
Reason 1:
Explanation: ......
.
......

Reason 2:
Explanation: ......

......

This example is downloaded from www.mybusinessstudies.com. A comprehensive website 8


for IGCSE Business Studies, Business news, Study Techniques and lots of resources for
teachers and sudents.

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