1.1

Business activity

10 flashcards to master Business activity

Smart Spaced Repetition

Rate each card Hard, Okay, or Easy after flipping. Your progress is saved and cards are scheduled for optimal review intervals.

Definition Flip

Define 'business activity' in the context of satisfying needs and wants.

Answer Flip

Business activity involves using scarce resources to produce goods and services that satisfy consumers' needs and wants.

Example: a bakery engages in business activity by using flour, labor, and equipment to produce bread and cakes.
Key Concept Flip

Explain the difference between a 'need' and a 'want', providing an example of each.

Answer Flip

A 'need' is something essential for survival, such as food or shelter. A 'want' is something desirable but not essential, like a new phone or a luxury car. Businesses aim to satisfy both needs and wants.

Definition Flip

What is meant by 'scarcity' and how does it impact business decision-making?

Answer Flip

Scarcity refers to the limited availability of resources to meet unlimited wants. It forces businesses to make choices about which goods and services to produce and how to allocate resources efficiently.

Example: a company choosing between investing in new machinery or hiring more workers.
Definition Flip

List the four 'factors of production' and give an example of each.

Answer Flip

The four factors of production are: Land (natural resources like soil and minerals), Labour (human effort), Capital (machinery and equipment), and Enterprise (the skill to organize the other factors).

Example: a farmer (enterprise) using land, workers (labour), and a tractor (capital).
Definition Flip

Describe the role of 'enterprise' in business activity.

Answer Flip

'Enterprise' refers to the skills and initiative of individuals who take the risk of starting and managing a business. Entrepreneurs organize the other factors of production and make decisions to create goods or services.

Example: Steve Jobs' vision and leadership at Apple.
Definition Flip

What is opportunity cost?

Answer Flip

The next best alternative foregone when making a choice.

Example: If you spend $10 on a movie ticket, the opportunity cost is what else you could have bought with that $10.
Definition Flip

Explain 'specialisation' and its benefits to businesses.

Answer Flip

Specialisation occurs when individuals or businesses focus on producing a limited range of goods or services. This can lead to increased efficiency, higher quality, and lower costs.

Example: a car factory specializing in assembling only a certain car model.
Definition Flip

Define 'added value' and explain how businesses can increase it.

Answer Flip

'Added value' is the difference between the cost of inputs and the price of the finished product or service. Businesses can increase added value by improving quality, branding, customer service, or product design.

Example: a coffee shop adding value by providing a comfortable atmosphere and skilled baristas.
Key Concept Flip

Explain why profit is important for a business.

Answer Flip

Profit is the revenue left over after all costs have been deducted. It is essential for reinvestment in the business, rewarding the owners for their risk, and attracting investors. Businesses that do not make a profit are unlikely to survive in the long term.

Key Concept Flip

Outline three reasons why a business might have objectives other than profit.

Answer Flip

Besides profit, businesses may aim for growth (expanding operations), market share (increasing percentage of sales in a market), and social responsibility (positive impact on the community and environment).

Example: A company donating a percentage of profits to charity to meet social responsibility objectives.

Test yourself

Practice with MCQ questions to check your understanding.

Take Quiz
1.2 Classification of businesses

Key Questions: Business activity

Define 'business activity' in the context of satisfying needs and wants.

Business activity involves using scarce resources to produce goods and services that satisfy consumers' needs and wants.

Example: a bakery engages in business activity by using flour, labor, and equipment to produce bread and cakes.
What is meant by 'scarcity' and how does it impact business decision-making?

Scarcity refers to the limited availability of resources to meet unlimited wants. It forces businesses to make choices about which goods and services to produce and how to allocate resources efficiently.

Example: a company choosing between investing in new machinery or hiring more workers.
List the four 'factors of production' and give an example of each.

The four factors of production are: Land (natural resources like soil and minerals), Labour (human effort), Capital (machinery and equipment), and Enterprise (the skill to organize the other factors).

Example: a farmer (enterprise) using land, workers (labour), and a tractor (capital).
Describe the role of 'enterprise' in business activity.

'Enterprise' refers to the skills and initiative of individuals who take the risk of starting and managing a business. Entrepreneurs organize the other factors of production and make decisions to create goods or services.

Example: Steve Jobs' vision and leadership at Apple.
What is opportunity cost?

The next best alternative foregone when making a choice.

Example: If you spend $10 on a movie ticket, the opportunity cost is what else you could have bought with that $10.

About Business activity (1.1)

These 10 flashcards cover everything you need to know about Business activity for your Cambridge IGCSE Business Studies (0450) exam. Each card is designed based on the official syllabus requirements.

What You'll Learn

How to Study Effectively

Use the Study Mode button above to test yourself one card at a time. Try to answer each question before flipping the card. Review cards you find difficult more frequently.

Continue Learning

After mastering Business activity, explore these related topics: