Business activity-1

Question 1

What are the factors of production?

Answer 1

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

Question 2

What is meant by the term added value?

Answer 2

Added value is the difference between the price of the product and the production cost of the product.

Question 3

What is land?

Answer 3

The word land is used to cover all things found on a piece of land, such as water, including rivers, etc. It also includes the animals.

Question 4

What is labour?

Answer 4

Labor is the number of people available to make a product.

Question 5

What is capital?

Answer 5

Capital is the finance, machinery, and equipment needed to make a product.

Question 6

What is an enterprise?

Answer 6

enterprise is a person who takes uncertain risks for a business. These people are liable for all risks, as they are the ones who take all the uncertain risks.

Question 7

What is the main culprit for scarcity?

Answer 7

Unlimited wants + limited resources = scarcity.

Question 8

What is the opportunity cost?

Answer 8

Opportunity cost is the next best alternative forgone.

Question 9

What is a specialization?

Answer 9

Specialization occurs when people, businesses, and individuals concentrate on what they are best at.

Question 10

What are the advantages of specialization?

Answer 10

1. The workers are trained to do 1 task, which increases efficiency and the output of the business.
2. Less time is wasted, as workers are only taught one thing and do not have to move from one workbench to another.
3. It is cheaper and quicker to teach workers, as only a few skill need to be taught

Question 11

What are the disadvantages of specialisation?

Answer 11

1. Workers can get tired of doing the same job and due to this, efficiency can decrease.
2. If one worker is absent, the rest of the production will stop, as no other person can do the job of the absentee.

Question 12

What is the purpose of a business?

Answer 12

The purpose of a business is to combine all the factors of production and make a good that satisfies people’s wants.

Question 13

How can businesses be owned?

Answer 13

Businesses can be owned privately.
by the government or by thousands of shareholders.

Question 14

Who is a soul trader?

Answer 14

A soul trader is a person who single-handedly owns and manages a business.

Question 15

Why is adding value important?

Answer 15

Adding value is important because:
You can also pay for other costs, such as labour costs, management expenses, advertising, and power.

Question 16

What are the ways to add value to a product?

Answer 16

1. Increase the selling price of the product by making it look more luxurious and high-end.This can be done by using higher quality packaging. This will also increase the production cost.
2. Reduce the quality of the product but keep the price the same. You might lose customers if they notice the quality drop.