Nature Of Business Activity Definitions

Front 1

Added value

Back 1

Added value is the difference between the price of the good or service and the total cost of the inputs that went into making it. It is the value that is added to the inputs by the production process.

Front 2

Businesses

Back 2

Businesses are organisations involved in the production of goods and/or the provision of services

Front 3

Capital

Back 3

Capital is one of the four factors of production (an input into the production process) and refers to man made resources e.g. machines, factories and other plant and equipment. The process of buying capital is called investment.

Front 4

Division of labour

Back 4

The 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.

Front 5

Entrepreneurs

Back 5

Entrepreneurs are people who manage, organize and plan the other three factors of production. They are risk takers who exploit business opportunities in return for profit.

Front 6

Factors of production

Back 6

The inputs (or resources) necessary for the production process: land, labour, capital and enterprise.

Front 7

Functional areas

Back 7

The term used to refer to the different sections of a business. These are usually named as the marketing, production, finance and human resources department.

Front 8

Industrialisation (HL)

Back 8

The process experienced by a country that moves away from a primary production towards manufacturing as its principal sector for national output and employment.

Front 9

Labour

Back 9

refers to physical and mental human effort used in the production process

Front 10

Land

Back 10

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.

Front 11

Opportunity cost

Back 11

The cost measured in terms of the best alternative that is foregone when a choice is made.

Front 12

Primary sector

Back 12

Businesses involved in the cultivation or extraction of natural resources, such as farming, mining, quarrying, fishing, oil exploration and forestry.

Front 13

Secondary sector

Back 13

The section of the economy where business activity is concerned with the construction and manufacturing of products.

Front 14

Structural change

Back 14

A shift in the relative share of national output and employment that is attributed to each business sector.

Front 15

Tertiary Sector

Back 15

The section of economy where business activity is concerned with the provision of services to customers.