Cambridge IGCSE Businees study 1.Introduction to business activity

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. 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. -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. 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. 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. 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. Opportunity cost-The cost of
something In terms of the next
best thing

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. 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