1.1 business activity

Question 1

what is the economic problem

Answer 1

unlimited wants but limited recources- scarcity

Question 2

factor of production

Answer 2

land- natural recources
labour- number of people available to make
captial- finacne and machinery needed to produce good
enterprise- skill and risktaking ability to put factors of prodcution together to prodcue the good

Question 3

opportunity cost

Answer 3

the next best alternative given up by choosing another item

Question 4

specialization

Answer 4

when people and business concentrate wheat they are best at

Question 5

why specialization is common

Answer 5

• specialized machinery and technology is widely available
• increasing comp = lower cos
• more speaclzitation= higher living standard

Question 6

division of labor

Answer 6

production process is split up into different task and each worker performs one of these tasks

Question 7

advantages of specialization

Answer 7

• increased efficiency and output because of specialization
• less time wasted moving from benches
• quick and cheaper to train workers as less skill to teach

Question 8

disadvantages of specialization

Answer 8

• less efficiency cuz bored of one task
• one worker is absent no one can fill in
• less mobility

Question 9

added value

Answer 9

difference between cost price of materials and components bought in and the selling price of a prodcut

Question 10

added value is important because

Answer 10

• helps pay for other costs

- helps make profit