Summary Olevel/IGCSE Business Studies Chapter 1: Business Activity
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Course
Business
Institution
Sixth Year / 12th Grade
These class notes aid in removing the need for a book as they make clear all the topics needed to understand the chapter on Business activities for O level and IGCSE Business.
BUSINESS STUDIES
SECTION 1
CHAPTER 1: BUSINESS ACTIVITY
ECONOMIC PROBLEM:
Needs: A good or service essential for living
Want: A good or service people would like to have but is not
necessary for living.
People’s wants are infinite resulting in the creation of the
economic problem
Economic problem: Unlimited wants but limited resources to
produce goods and services to satisfy these wants.
Economic problem leads to creation of scarcity.
FACTORS OF PRODUCTION
Scarcity is caused due to shortage of Factors of production
the produce goods and services the population needs and
wants
Factors of production: Resources and input used to produce
goods and services. There are 4 factors of production which
are limited in supply.
1. Land: Natural resources provided by nature. Includes
surface of earth, forests, oil, minerals, gas, climate.
2. Labour: All human resources (people) available to
make the product.
3. Capital: All man-made resources available such as
machinery, equipment and even capital for
manufacturing.
4. Enterprise: The ability to take risks and run a business
venture. A person who has enterprise is called an
entrepreneur. Entrepreneur organize all other factors
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