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| Businesses are organisations that are involved in the production of goods and/or the provision of services. |
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| Capital refers to all non-natural resources used in the production process. Probably the best example of capital is money, but the term also includes resouces such as machiner, tools, equipment and factories. |
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| Division of labour refers to the specialisation of workers in the provision of goods and/or services by breaking a job down into particular roles or components that are repeated by the same workers. |
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| Entrepreneurs are people who manage, organise and plan the other three factors of production. They are risk takers who exploit business opportunities in return for profits. |
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| Factors of production are the inputs (or resources) necessary for the production process: land, labour, capital and enterprise (also known as entrepreneurship). |
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| Functional areas is a term used to refer to the different sections of a business. These are usually named as the marketing, production, finance and human resources department. |
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| Industrialisation is the process experienced by a country that moves away from primary production towards manufacturing as its principal sector for national output and employment. |
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| Labour refers to physical and mental human effort used in the production process. |
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| Land means natural resources that can be found on the planet. This includes renewable and non-renewable natural resources such as water, fish, wood and physical land itself. |
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| Opportunity cost refers to the cost measured in terms of the next best alternative that is foregone when a choice is being made, eg: money today can be either spent for immediate benefit or saved for the future. |
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| Primary sector refers to businesses involved in the cultivation or extraction of natural resources, such as farming, mining, quarrying, fishing, oil exploration and forestry. |
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| Private sector is the part of the economy under the control of private individuals and businesses rather than the government. Examples might include sole traders, partnerships and companies. |
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| Public secgtor is the part of the economy under the control of the government. Examples might include state health and education services, the emergency services (police, fire service and ambulance) and national defence. |
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| Secondary sector refers to the section of the economy where business activity is concerned with the construction and manufacturing of physical products. Automation and mechanisation in modern societies has seen this sector decline in terms of employment. |
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| Structural change refers to a shift in the relative share of national output and employment that is attributed to each business sector, i.e. primary, secondary and tertiary sectors. |
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| Tertiary sector refers to the section of the economy where business activity is concerned with the provision of services to customers. In modern societies, it is the largest sector in terms of employment and output. |
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| Value added is the difference between a product's price and the total cost of the inputs that went into making it. It is the extra worth created in the production process. |
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