Study Guide G08 ~ Economic and Management Sciences
Unit
1
Needs and desires affect the way societies work, live and spend money. People’s needs and desires are unlimited, but the resources needed to satisfy these needs and desires are limited. Goods and services There are four main factors of production: labour, capital, natural resources and entrepreneurship. •
Labour: Refers to the work people do.
•
Capital: Refers to money, as well as equipment, buildings and land that we call capital goods.
•
Natural resources: Resources that come from nature, e.g., water, soil and oil.
•
Entrepreneurship: Refers to an entrepreneur’s ability to combine and successfully use all three of the other factors of production in order to produce a final product or provide a service to consumers.
Inequality and poverty Poverty means that people do not have enough money to meet their basic needs. Factors that contribute to poverty are: •
Inequalities of the past.
•
Illiteracy and lack of education.
•
Economic conditions in a country.
The production process Productivity refers to the amount of goods and services that can be produced in a certain amount of time. •
The primary sector produces raw materials, e.g., agriculture and mining.
•
The secondary sector produces finished goods from the raw materials produced by the primary sector.
•
The tertiary sector sells the goods produced by the secondary sector and provides services to consumers.
Developing countries usually have a larger primary sector, while developed countries tend to have larger secondary and tertiary sectors.
© Impaq
12