Introduction to business activity

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Cambridge IGCSE Businees study
1.Introduction to business activity

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Introduction to business activity

  1. 1. -Needs and wants -The purpose of business activity -The objectives of non-profit making activity private and public enterprice -The concept of adding value
  2. 2. Business produce goods and services The products of business Goods Goods are things you can touch and use, such as pencil and hat Services Services are things that people do for you , such as selling you goods in a shop or cutting your hair
  3. 3. -Needs are things that we must have in order to live - Wants are items that we would like to have , although we won`t die without them -Make life more enjoyable
  4. 4. DEMAND Effective demand When you want something , you create a demand for it . You cannot satisfy your want unless » you have the money and » you are willing to pay for it People create effective demand when enough of them want something and are able and willing pay for it A other word, demand for a product that is backed up by an ability and willingness to pay for it
  5. 5. The sector of business consisting of businesses owned by private individuals or groups, called private sector Business owned and run by the government are public enterprices.They are called public sector Non-profit-making organisations include charities and voluntary organisations.These are set up to fulfill a perceived social need or provide help to specific section of the community
  6. 6. There are enough of some resources , such as air , to satisfy everybody`s needs . But most resourse are not plentiful enough for this. Since the resource needed to produce goods and services, a choice must be made as to what to produce from them Resource is items of limited ability that can be used in human activity
  7. 7. Opportunity cost-The cost of something In terms of the next best thing
  8. 8. Labour is the effort or work provided by people Capital includes items used in the production of goods and services that made by people Enterprice is the ability,skill and enthusiasm to take the risks involved in developing a business idea and gathering the appropriate recources
  9. 9. As the transformation – or production – process proceeds through various stages, gain added value to the raw materials each stage .When the product is finished , its value – and the price at which it will be sold - is more than the value of the factors of production used to make the product.Therefore the amount of value added to the product and the cost of all the resources used to produce the product
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