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Terms U1.1
Nature of business activity
Term | Definition |
---|---|
Added value | the difference between a product's price and total cost of the inputs that went into making it. It is the extra worth created in the production process. |
Business | organizations involved in the production of goods and/or the provision of services. |
Capital | refers to all non-natural resources used in the production process. An example is money, but the term also includes resources such as machinery,tools,equipment and factories. |
Division of labour | refers to the specialisation of workers in the provision of goods and/or services by breaking a job down into particular roles or tasks that are repeated by the same workers. |
Entrepreneurs | people who manage, organise and plan the other three factors of production. They are risk takers who exploit business opportunities in return for profits. |
Factors of production | the inputs(or resources) necessary for the production process: land,labour,caital and enterprise. |
Funtional areas | the term used to refer to the different sections of a business. These are usually named as the marketing,production,finance and human resources departments. |
Labour | refers to the physical and mental human effort used in the production process. |
Land | natural resources that can be found on the planet. This includes renewable and non-renewable natural resources such as water,fish,wood and physical land itself. |
Opportunity cost | refers to the cost measured in terms of the best alternative that is forgone when a choice is made. |
Primary sector | Refers to business involved int the cultivation or extraction of natural resources, such as farming, mining, quarrying, fishing,oil exploration and forestry. |
Secondary sector | the section of the economy where the business activity is concerned with the construction and manufacturing of products. |
Tertiary sector | refers to the section of the economy where business activity is concerned with the provision of services to customers. |