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level: 1.1 Business activity

Questions and Answers List

Question	Answer
A good or service essential for living	Need (limited)
A good or service people would like to have but is not essential for living	Wants (unlimited)
A system for organizing production and exchange of goods and services	Economy
The economic problem is to match limited resources to unlimited wants and needs	The economic problem
Insufficient resources to fulfill the total wants of population	Scarcity
Land, capital, labor, entrepreneurs	Factors of production
Natural resources not created by human effort	Land
Tools, equipment and factories used in production	Capital
Workers	Labor
Individuals who start a new business or bring a product to market	Entrepreneurs
The next best alternative given up by choosing another item	Opportunity cost
When a business and its employees focus on what they are best at	Specialization
Production process is split up into different tasks and each worker performs one of these tasks.	Division of labor
The difference between the selling price of a product and the cost of making it	Added value