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Unit 1

Need: is a good or service essential for living.
Want: is a good or service which people would like to have, but which is not essential for living. People´s wants are unlimited.
Economic problem: is the result from there being unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity.

Factors of production: are thoseresources needed to produce goods or services.
-Land: natural resources e.g.: Oil, gas metals
-Labour: the efforts of people needed to make products.
-Capital: machinery, and equipment.
-Enterprise: ideas
Scarcity: lack of sufficient products to fulfill the total wants.

Opportunity cost: is the next best alternative

Specialization:
-machinery is more use.
-so the companies employedmore workers.

Division of labour: is when the production process is split into different task, for better performance.
Businesses combine factors of production to make products(goods and services) which satisfy people´s wants.

|Advantages |Disadvantages ||Efficiency |Workers become bored because of doing always the same job. |
|Less time is wasted because of moving the product. |No work can be absent. |

Objectives of a business: Make profit, increase value added, expand thebusiness, to achieve business survival, provide a service to the community.


Stakeholder: persons that are interest in the activities and performance of the business: owners, workers, managers, consumers, government, the community.



P:12

Unit 2
-Primary sector: are the persons who work in the extract of materials as the woodcutters.
-Secondary sector: workers of industries andmanufacters.
-Tertiary sector: are the ones that provide services.
De- industrialization: occurs when there is a decline of the importance of the secondary sector.


Free market economy or market economy: has no government control.

|Advantages |Disadvantages ||Consumers are free to choose what they want to buy. |No government providing goods or services. |
|Non-existent taxes. More income for workers |No control of the economy by the goverment |
|Businesses competition low prices. |Businesses might beencouraged to created MONOPOLIES: is a business which |
| |controls all of the market for a product. |
|More profits. | |


Commanded or Plan economy:does not have a private sector as all resources are owned by the state.

|Advantages |Disadvantages |
|Government controls. |Less incentive to work. Private property is not allowed. |
|Work foreverybody. |Gov. may not produce goods which people want to buy. |
|Needs are satisfy. |Lack of profit motive for firms leads to low efficiency. |


Mixed economy: Have both. Private and state sector.
Government areas:
-health
-education
-defence...
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