Chapter 1 : Introduction to Business Activity

Business
Produce

Goods Services

Touch
Intangible
and use
 Needs & Wants

Needs Wants

Items we would
Items we must
like to have
have in order to
although we wont
live
die without them

Demand
When you want something
demand is created
Demand & Effective Demand
You cannot satisfy your
demand or want unless you
have money and you are
ready to pay for it.
Effective Demand
When majority of people are
willing to pay for certain
product and majority of them
are ready to pay for the
product then effective
demand is created
 Business

Private Sector Public Sector NGOS

Set up to provide help to a specific

section of the community.
Enterprises run by Government are
Run by private individuals. Private individuals can set up
public enterprises.
NGOS.
Profit is not main goal.
Profit is not main goal.
 Scarcity

Everything in this
earth is found to
be in limited
supply.
 Business Activity involves the use of
resources known as

Factors of production.

Land Labour Capital & Enterprise

Items used in the production of

goods and services are known as
All resources that occur naturally capital.
The effort or work provided by
example: Land coal,oil, gas, fish, Enterprise is the ability, skill, and
people
farms, birds, and crops enthusiasm of an individual involved
in developing a business idea.
 Labour Intensive v/s
Capital Intensive

Labour Intensive Capital Intensive

Countries where labour Cheaper and more

are more prefered as labour intensive accurate than labour
compared to machinery is production is a feature of intensive production.
known as labour intensive developing countries. It is preferred in
countries. developed countries.
 Added Value

The difference between

the selling price of a
product and the cost of
a raw material used to
make it.