Define the following terms as used in Business Studies. (4 mks)
It refers to the study of how human beings strive to satisfy their unlimited wants using the limited / scarce resources.
It refers to the process of identifying business opportunity and acquiring necessary resources to maximize the profit.
(iii) Opportunity cost
This is the value of the best next alternative forgone when acquiring or when a choice has been made.
(iv) Scale of preference
It is a list of wants showing the order in which they are satisfied from the most urgent to the least urgent.
INTRODUCTION TO ECONOMIC DEVELOPMENT AND PLANNING
This is the increase in the productivity of a country which can be seen in the continued increase in the national income over a period of years.
It can be measured by taking the average percentage of increase in national income over a period of time (number of years) and be assumed to be the average rate of economic growth in the country.
This is the quantitative change or increase in a country’s national income over the years, accompanied by favorable changes in the structures within the country that leads to general improvement of the individual well being, as well as the entire nation.
A country may experience economic growth without experiencing economic development. This is because the increase in the national income may be as a result of people working for long hours without any time for rest, recreation and other development to occur in their body. This will make them not to have better living, despite the fact that the national income shall have increased.
The expected structural changes to be realized in a case of economic development include;
Outline the differences that exist between economic growth and economic development
This refers to a situation whereby the economic growth is in the negative direction (decreasing) accompanied by uneven distribution of wealth and decrease in quality and quantity of the factors of production available
Characteristics of Underdevelopment
Goals of Economic Development
The following are the changes that economic development seeks to put in place, which in Kenya they have been joined together in what is referred to as the millennium development goals. They includes
Factor which may hinder development in a country
The rate of a country’s economic development may be influenced negatively by the following factors
This is the process through which the country establishes their objectives to be achieved, identify the resources that will be required and put in place the strategies or methods of acquiring the resources and achieving their pre-determined objectives.
In most cases their objectives or goals are the goals of economic development
The plan will prioritize the objectives to be achieved and even break it down in to targets that if achieved with the planned strategy and resources, the objective shall have been achieved.
Need for economic planning
It enhances the following
Problems encountered in development planning
Problems at the planning stage
Problems at the implementation stage
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Business Studies Notes Form 1 - 4
Atika School Team