Business Environment and PESTEL Analysis Quiz

PESTEL is a tool used to analyse a business environment, focusing on Political, Economical, Socio-Cultural, and Ecological factors. It is important to conduct PESTEL Analysis because it gives a good picture of the external environment of the country the business wishes to operate in and determines the favorability of doing business in a new country.

The 2 levels of business environment are macro external factors that affect the entire country (all industries) and contextual environment, and micro external factors that affect the industry/business and operational environment.

Economics is the study of how people best allocate limited resources to meet unlimited wants. Scarcity refers to limited resources that are unable to meet unlimited wants.

<p>The central economic problem is scarcity. Opportunity cost refers to the next best alternative forgone when a decision is made.</p> Signup and view all the answers

<p>The factors of production are land (natural resources, land), labor, capital (physical - machinery and tools, human - skills and experience), and entrepreneurship. PPF stands for Production Possibility Frontier, which illustrates the maximum potential output combinations of two goods or services an economy can produce with limited resources.</p> Signup and view all the answers