1.+Nature+of+business+activity.

=What is a business? =

The term 'business' is used to describe all the commercial activities undertaken by the various organisations, which produce and supply goods and services.

A business has many features. It is:


 * A decision making organisation
 * made up of groups of workers, managers, directors and shareholders
 * which exists in association with customers, suppliers, competitors, the environment, local, national and other governments
 * that uses factors of production
 * to produce and sell goods and/or services
 * so as to make a profit.(although other objectives may also be important)

[|Adding Value]


 * factors of production **

To produce goods and services requires resources. We call these the factor inputs or factors of production.

Economic resources are scarce relative to the infinite needs and wants of people and businesses operating in the economy. It is important to use these resources efficiently in order to maximise the output that can be produced from them.

Economists make a distinction between four types of resources - land, labour, capital and enterprise: **Land** Land is not just the land we build our factories and schools upon, but also the natural resources available for production. Some nations are endowed with natural resources and exploit this by specialising in the extraction and production of these resources - for example Saudi Arabia has become very rich because it has oil. <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Labour is the human input into the production process. <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Capital refers to the machines, roads, factories and office blocks which human beings have produced in order to produce other goods and services. (The term is sometimes used to mean the money used to fund the business, but really for this we should use the term finance for this) <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">An entrepreneur is the owner or part owner of the business, in that they have taken a risk with their own money, to set the business up. They are also the manager and organiser of all the other factors of production. They must fulfill both of these to be considered an entrepreneur.
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Labour **
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Capital **
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Enterprise. **

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">[|Business functions.ppt]
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Business functions. **

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Business activity can be classified into these three sectors. Research what these terms mean and give examples of firms operating in each sector.
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Primary secondary and tertiary sectors. **

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Look at three different countries (ideally a developed, developing and a lesser economically developed country) and identify the different importance of each sector, in terms of output and employment. Why the differences between the countries?
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Extension Task (HL students): **

<span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px; line-height: 0px; overflow: hidden;">
 * <span style="font-family: 'Trebuchet MS',Helvetica,sans-serif; font-size: 16px;">Student Plenary Activity **