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Section 1 - Coggle Diagram
Section 1
Unit 1
needs ≠ wants
wants --> unlimited + limited resources = economic porblem
Not enough --> factors of production (land/ labour/ capital/ enterprise)
Limited resources --> the need to choose what to satisfy -->
Opportunity cost
Specialisation
division of labour = more efficiency
Added value
Selling price of product - materials costs = added value
Clasification of Businesses
Stages of economic activity
Primary sector --> developing countrie
Secondary sector --> developing/ developed countries
Tertiary sector --> developed countries
Changes in sector importance --> de-industralisation
Economies
Private sector
Public sector
Mixed economies --> private + public sector
Enterprise, business growth and size
Entrepreneur
benefits and disadvantages <-- creates a new venture
-hard working -risk taker -creative -etc
government support
Business plan
Business size
investors/ government/ competitors/ banks/ workers --> find it useful
Can be measured: employee's number/ value of output/ value of sales/ value of capital employed
Business growth
growth = higher profit/ lower average costs/ larger share/ etc
Internal growth
External growth
merger/ conglomerate merger or take over/ acquisition
Integrations
Horizontal integration - Vertical integration
Some decide to stay small
Some fail to grow
Problems of growth
Difficult to controle/ bigger costs