1.1 – Business Activity

Question 1

Define Need

Answer 1

A good or service essential for living

Question 2

Define Want

Answer 2

A good or service that people would like to have, but is not required for living

Question 3

Define Scarcity

Answer 3

Unlimited wants and limited resources to satisfy those wants

Question 4

Define Opportunity cost

Answer 4

Next best alternative forgone by choosing another item

Question 5

Define Factor of Production

Answer 5

Resources required to produce goods or services

Question 6

Give Factors of Production

Answer 6

1. Land
2. Labour
3. Capital
4. Enterprise

Question 7

Define Land

Answer 7

Natural resources

Question 8

Define Labour

Answer 8

Physical/mental efforts by workers in production process

Question 9

Define Capital

Answer 9

Finance/equipment needed to produce good/service

Question 10

Define Enterprise

Answer 10

Risk taking ability of a person

Question 11

Define Specialization

Answer 11

when a person/organisation concentrates on a task at which they are best at

Question 12

Pro/Con of Specialization

Answer 12

Pros:
1. Increase efficiency
2. Faster production
3. Quicker to train labours
4. Skill development

Cons:
1. Monotonous
2. Higher labour turnover
3. Over-dependency

Question 13

Purpose of Business Activity

Answer 13

Business is an organization that use factors of production to create goods/services to supply human want/need

Question 14

Define Added Value

Answer 14

Difference between cost of material bought in and selling price of product

Question 15

How to increase added value?

Answer 15

1. Reducing cost of production
2. Raising prices
3. Branding
4. Adding special features
5. Provide premium services