1.2 Business Economics : Unit 14 -16

Question 1

1. What is production?

Answer 1

• a process that involves converting resources into goods or services.

Question 2

2. What do you mean by factors of production?

Answer 2

• resources used to produce goods and services, which include land, labor, capital and enterprise.

Question 3

3. What are the 4 factors of production?

Answer 3

• Land
• Labor
• Capital
• Enterprise

Question 4

4. What is human capital?

Answer 4

• value of workforce or an individual worker.

Question 5

5. What is labour?

Answer 5

• people used in production.

Question 6

6, What are the two types of capital?

Answer 6

• Working capital/ circulating capital
• Fixed capital

Question 7

11. What is capital?

Answer 7

Capital is the artificial resource used for production

Question 8

7. What is working capital/ circulating capital?

Answer 8

they are resources used up in the production such as raw materials and components.

Question 9

8. What is fixed capital?

Answer 9

• stock of “man-made” resources, such as machines and tools, used to help make goods and services.

Question 10

9. Who are entrepreneurs?

Answer 10

• individuals who organize the other factors of production and risk their own money in a business venture.

Question 11

10. What is land?

Answer 11

• a plot of land on which to locate or operate their premises.

Question 12

12. What are the two types of production?

Answer 12

• capital intensive production
• labour intensive production

Question 13

13. What is capital intensive production?

Answer 13

-production that relies more heavily on machinery relative to labor.

Question 14

14. What is labour-intensive production?

Answer 14

• production that relies more heavily on labor relative to machinery.

Question 15

15. What is primary sector?

Answer 15

production involving extraction of raw materials from the earth.

Question 16

16. What are the 4 examples in primary sector?

Answer 16

• Agriculture
• Fishing
• Forestry
• Mining and quarrying

Question 17

17. What are assembly plants?

Answer 17

• factory where parts are put together to make a final product

Question 18

19. What is the secondary sector?

Answer 18

• production involving the processing of raw materials into finished and semi- finished goods.

Question 19

20. What is tertiary sector?

Answer 19

• production of services in the economy.

Question 20

21. What are the 6 examples in the tertiary sector?

Answer 20

• commercial services
• financial services
• household services
• leisure services
• professional services
• transport

Question 21

22. What is de-industrialization?

Answer 21

• decline in manufacturing.

Question 22

23. What are the 4 reasons for de-industrialization?

Answer 22

• people prefer to spend their income on services rather than manufactured goods.
• fierce competition in the production of manufactured goods from developing countries.
• Growth of the public sector.
• Advances in technology in manufacturing.

Question 23

24. What is productivity?

Answer 23

• rate at which goods are produced, and the amount produced in relation to the work, time, and money needed to produce them.

Question 24

25. What are the 5 ways to affect the productivity of land?

Answer 24

• Fertilisers and pesticides
• drainage
• irrigation
• reclamation
• genetically modified crops

Question 25

26. 4 ways to improve labor quality?

Answer 25

• training
• improved motivation
• improved working practices
• Migration

Question 26

27. What is division of labour?

Answer 26

breaking down of the production process into small parts with each worker allocated to a specific task.

Question 27

28. What is specialization?

Answer 27

• production of a limited range of goods by individuals, firms, regions or countries.

Question 28

29. Name 3 advantages of division of labor to worker.

Answer 28

• worker is more skilled due to repetition.
• more likely to get paid more.
• more job satisfaction.

Question 29

30. Name 3 disadvantages of division of labor to worker.

Answer 29

• work can become boring because it is repetitive.
• health implications for workers.
• too specialized is rick of unemployment

Question 30

31. Name 3 advantages of division of labor to businesses.

Answer 30

• efficiency.
• less mistakes= less wastage as a result of specialization.
• Increased productivity.

Question 31

32. Name 3 disadvantages of the division of labor to businesses.

Answer 31

• too repetitive and boring poor motivation. affects quality.
• Too much interdependence may interrupt production process.
• Loss of flexibility.

Question 32

33. What are costs?

Answer 32

expenses that must be met when setting uo and running a business.

Question 33

34. What is fixed cost?

Answer 33

(overheads) costs that do not vary with the level of output.

Question 34

35. What is a variable cost?

Answer 34

costs that change when out put levels change.

Question 35

36. What do you mean by total cost?

Answer 35

fixed costs and variable costs added together.

Question 36

37. What do you mean by average cost?

Answer 36

Average cost is the cost of producing a single unit of output.

Question 37

38. What is profit?

Answer 37

Profit is the difference between total revenue and total cost.