Due to scarcity, people are often forced to make choices. Opportunity cost is the next best alternative forgone by choosing another item. For example, we have a limited amount of money but there are a lot of things we would like to buy, using the money. It is a situation that exists when there are unlimited wants and limited resources to produce the goods and services to satisfy those wants. Examples include cars and watching movies. Want: a good or service that people would like to have, but is not required for living. Examples include water and food and shelter. Need: a good or service essential for living. Not clear? Don’t worry, by the end of this chapter, you should be getting a clear picture of what a business is. So what is a business, or what is business studies? Here’s the very posh definition for it: “the study of economics and management” We are surrounded by businesses and we could not imagine our life without the products we buy from them. The word ‘business’ is very familiar to us.
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