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The Need for, and Nature of, Business Activity.
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The Need for, and Nature of, Business Activity. 1. The production of goods and services that satisfy the needs of consumers or other firms (often with the aim of making a profit) is known as 'business activity'. Businesses need to purchase resources (known as factors of production) to do this. 2. There are four factors of production; they are: land, labour, capital and enterprise. Normally, the term 'land' includes the natural resources that are available in the area, such as crude oil and coal. Labour is the workforce, manual and skilled alike. Capital includes finance as well as the man-made resources required to run the business. Any business needs enterprise for production to commence. It combines the other factors of production with entrepreneurship (providing a managing, decisive and co-ordinating role) to create a unit that is capable of producing goods and services. 3. An increase in industrialisation boosts the GDP, which raises the...
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