topic 1

• Business is an organisation that provides goods and services that satisfies needs and wants in a profitable or non-profitable way.
• Inputs are the resources that businesses use in order to transform them into outputs by adding value. In traditional economic theory these resources/inputs are called factors of production
• The main inputs in a business include: land, labour, capital and entrepreneurship
• Land (physical resources) refers to land, real estate or raw materials, for example, fish, gold, wood.(anything we can extract from earth)
• Labour (human resources) refers to the people in business for example employees and managers
• Capital (financial resources) refers to cash and other forms of financial resources as well as capital goods, i.e. things/equipment used in production: office chairs, desks, laptops or assembly line robots
• Entrepreneurship is wisdom or skillset that allow people to take risks and combines all the factors of production to add value in order to transform them into products (goods and services).
• Adding value occurs in a transformation process when outputs are produced that are worth more than the inputs brought in to provide them
• Processes: The second stage in input-output model is adding value
• Two ways of adding value: production of goods and provision of services
• Capital-intensive refers to high reliance on machinery in the production process. For example, car manufacturing is usually highly automated and is mainly performed by robots.
• Labour-intensive refers to high reliance on human labour. For example, the textile industry (manufacturing of clothes) is usually highly labor-intensive and depends on the manual work of people.
• Output is a product, that can either be tangible (good) or intangible (service). Once again, a product is either a good or a service.
• If a product is sold by one business to another, this is a producer good or service. This relationship of one business to another is called B2B (business-to-business). For example, if a school buys desks and chairs from a furniture manufacturer, that would be a producer good.

   
• If a product is sold by business to the general public, this is a consumer good or service. This relationship is called B2C (business-to-consumer). For example, if your parents go to a shop and buy a desk and a chair for your bedroom, that would be a consumer good. As you can see, one and the same thing can be either producer or consumer good or service, depending on who it is sold to.
• The primary sector refers to business activity involved with the extraction of natural resources.
• The secondary sector refers to business activity involved with the manufacturing or construction of finished products.
• The tertiary sector refers business activity that involves providing services to customers, i.e. consumers and business clients.
• The quaternary sector refers to business activity involving the creation or sharing of knowledge and information.
• • Goods are physical products, e.g. food, clothes, furniture, cars, and smartphones.