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Business

The document discusses key business concepts such as needs, wants, opportunity cost, and specialization. It outlines the advantages and disadvantages of specialization, including increased efficiency and skill development versus higher labor turnover and over-dependency. Additionally, it addresses the factors of production, the economic problem of scarcity, and methods to increase added value in products.

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VaigaKurup
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11 views2 pages

Business

The document discusses key business concepts such as needs, wants, opportunity cost, and specialization. It outlines the advantages and disadvantages of specialization, including increased efficiency and skill development versus higher labor turnover and over-dependency. Additionally, it addresses the factors of production, the economic problem of scarcity, and methods to increase added value in products.

Uploaded by

VaigaKurup
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Business

→ needs- Necessitates

Wants - Not needed for living

opportunity cost - Another best alternative given up

by choosing another item

Specialisation: Specialization occurs when a person or organisation concentrates on a task at which they are best at.

ADVANTAGES

Workers are trained to do a particular task and specialise in this, thus increasing efficiency

Saves time and energy: production is faster by specialising

Quicker to train labourers: workers only concentrate on a task, they do not have to be trained in all aspects of the
production process

Skill development: workers can develop their skills as they do the same tasks repeatedly, mastering it.

DISADVANTAGES

Higher labour turnover as the workers may demand for higher salaries and company is unable to keep up with their
demands

Over-dependency: if worker(s) responsible for a particular task is absent, the entire production process may halt since
nobody else may be able to do the task.

Factor of production

→ LAND

LABOUR

Capital

enterprise

Business → Businesses combines the factors of production to creates goods and service to satisfy peoples want

economic problem → when there are unlimited wants but limited resources

leads to scarcity

Scarcity - When there are insufficient products to satisfy the total wants of the population.

Added value- It is the difference between selling price and the cost of production

How to increase the selling price?

Reducing the cost of production. Added value of a product is its price less the cost of production. Reducing cost of
production will increase the added value.

Raising prices. By increasing prices they can raise added value, in the same way as described above.

Can basically add value with

.Branding

. Adding special features

.Provide premium services etc.

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