1.1

• Need: a good or service essential for living. Examples include water and food and shelter.
• Want: a good or service that people would like to have, but is not required for living. Examples include cars and watching movies.
• Scarcity is the basic economic problem. It is a situation that exists when there are unlimited wants and limited resources to produce the goods and services to satisfy those wants. 
• Opportunity cost is the next best alternative forgone by choosing another item. Due to scarcity, people are often forced to make choices. When choices are made it leads to an opportunity cost
• Specialization occurs when a person or organisation concentrates on a task at which they are best at. 
• Adv of specialization

  • Workers are trained to do a particular task and specialise in this, thus increasing efficiency
  • Saves time and energy: production is faster by specialising
  • Quicker to train labourers: workers only concentrate on a task, they do not have to be trained in all aspects of the production process
  • Skill development: workers can develop their skills as they do the same tasks repeatedly, mastering it.
• Disadvantages Of specialization

  • It can get monotonous/boring for workers, doing the same tasks repeatedly
  • Higher labour turnover as the workers may demand for higher salaries and company is unable to keep up with their demands
  • Over-dependency: if worker(s) responsible for a particular task is absent, the entire production process may halt since nobody else may be able to do the task.
• Business is any organization that uses all the factors of production (resources) to create goods and services to satisfy human wants and needs.

  Businesses attempt to solve the problem of scarcity, using scarce resources, to produce and sell those goods and services that consumers need and want.
• Added value is the difference between the cost of materials bought in and the selling price of the product.Which is, the amount of value the business has added to the raw materials by turning it into finished products. 
• How to increase added value?

  • Reducing the cost of production. Added value of a product is its price less the cost of production. Reducing cost of production will increase the added value.
  • Raising prices. By increasing prices they can raise added value, in the same way as described above.