Needs and wants, scarcity, the factors of production, opportunity cost, added value and the purpose of business activity.
The purpose of business activity
Business activity uses scarce resources to produce goods and services that satisfy people's needs and wants.
A need is something essential for survival — food, water, shelter, clothing.
A want is something people would like but is not essential — holidays, smartphones, designer clothes. Wants are unlimited.
Because human wants are unlimited but resources are limited, there is scarcity. Business activity helps to overcome scarcity by combining resources to create useful output.
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