Purpose of business
Businesses combine resources to produce goods and services that satisfy needs and wants.
CAIE IGCSE Business 0264 - Paper 2
1.1 Business activity
Topical Past-Paper Questions
Why it’s here: The purpose of business activity, scarcity, opportunity cost, specialisation and added value.
Key concepts to revise
The main ideas to know for 1.1 Business activity.
Scarcity
Resources are limited while human wants are unlimited, so choices have to be made.
Factors of production
Land, labour, capital and enterprise are the resources used to produce output.
Needs and wants
Needs are essential for living, while wants are non-essential goods and services people would like.
Adding value
Added value is the selling price minus the cost of bought-in materials.
Opportunity cost
The next best alternative forgone when a decision is made.
Exam material
Past-paper questions
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