Vocabulary

Need

A need is something that is necessary for you.

Factors of productions

There are 4 factors of production:
  • Land - natural resources like gas, oil and metals.
  • Labor - staff/ how many
  • Capital - money, equipment, machinery
  • Enterprise - risk taking, skill
              

Want

Wants are goods that a person would like to afford it, it is not affecting your life if you don't have it.

Scarcity

Scarcity is the lack of resources to fulfill the wants of the population.
Economic problems
Unlimited wants but limited resources, to produce the goods and services to satisfy those wants.
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Opportunity cost
 It is the next best option given up by choosing another item.
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Specialization
This occurs when people concentrate on what they are best at.
  • Advantages: Increases efficiency and stop wasting time moving one thing from one place to another.
  • Disadvantages: Workers become bored easily, just because of doing one job and there will be less efficiency. Sometimes workers could be absent, no one could replace the missing place, in that case they can't produce anymore. 
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Division of Labor
This is when the production is split into different tasks. Each worker performs one of these tasks. This is a form of specialization.

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Added Value
It is the difference between the cost of the product and the materials which made that product. 
  • It can pay other costs such as labor costs, advertising.
  • Might make a profit if total costs is less than the added value.
NOT PROFIT!


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Businesses
Combine factors of production to make products, goods and services which satisfy people's wants.
ANSWERS:
 1. a) Needs: clean water, clothing, shelter
    Wants: Coca-cola, designer jeans, car, luxury house
    b) Needs are things that is necessary for our life.
         Wants are things we would like to have but it is not need for our life.
2. It is the lack of resources to satisfy our wants so we have make good decisions.
3. Four factors of production:
  • Land: natural resources, raw materials are needed for production
  • Labor: staff and workers run the process of production.
  • Capital: money for purchasing equipment or machines.
  • Enterprise: risk taking and skills
4. For example: I have 4 hundred thousand dollars, I bought a Ferrari but I could have bought a Bugatti Veyron, opportunity cost is the next best option that you could have chosen.
5. For example: 
  • Our school could build a new swimming pool rather than buying not really good computers.
  • Vietnamese government could build more hospitals instead of making bad quality streets.
6. Splitting into different tasks, each worker performs one of these tasks.
7. Workers focus on that they do best at, it will increase efficiency.
8. - Prepare supplies from store room 
    - Mix ingredients
    - Decorate the cakes
    - Put the cakes into a box or package.
9. - Jobs
    - Products
    - Taxes given away to the government
10. It is the difference between the cost of the product and the materials which made that product.
11. - Get cheaper supplies
     - Make a higher service and charge customers more money.