business activity

Question 1

needs

Answer 1

essential goods required for human survival

Question 2

wants

Answer 2

human desires which are not essential and are not required for survival

Question 3

production

Answer 3

the making of goods and services to satisfy human wants

Question 4

factors of production

Answer 4

land
labour
capital
enterprise

Question 5

land

Answer 5

any natural resource used in the production of a good or rendering of a service.
reward: rent

Question 6

labour

Answer 6

any human effort used in the production of a good or rendering of a service. can be mentally or physically.
types of labour:
skilled- requires training
semi-skilled - requires little training 
unskilled- does not require training 
reward: wage

Question 7

capital

Answer 7

any human-made resources used in the production of a good or rendering of a service.
reward: interest

Question 8

enterprise

Answer 8

the ability to take risks, start and run a business venture. this is done by an entrepreneur. an entrepreneur also does the decision making and organizes the other factors of production for a business.
they also organise the use of all the other factors of production.
reward: profit/loss

Question 9

primary production

Answer 9

firms that extract raw materials from the Earth

examples: mining, quarrying, farming etc

Question 10

secondary production

Answer 10

firms that manufacture (change raw materials into consumable goods) and construct buildings and roads

Question 11

tertiary production

Answer 11

firms that produce goods or render services to the general public and other firms.
examples: lawyers, doctors, retailers

Question 12

added value

Answer 12

the difference between what the business pays the suppliers and the price it charges its consumers.

Question 13

sources of added value

Answer 13

1. branding (e.g packaging jewellery in a very attractive box)
2. quality (an increase in quality)
3. speed (speed of service)
4. convenience
5. usp (unique selling point)
6. design (changing or altering the design)

Question 14

how can businesses add value

Answer 14

by altering the product with raw materials and proving something ‘different’

Question 15

importance of added value

Answer 15

1. increases the profit.
2. differentiates a business from its competitors.
3. adding value enables businesses to survive and be successful (in a competitive market)
4. enables businesses to save money for advertisement and other promotional acts.

Question 16

private sector

Answer 16

consists of businesses being run by an individual or a group of individuals where their only aim is making profit. consumers are free to buy certain goods and services and businesses decide the best way of producing their products.

Question 17

public sector

Answer 17

business activity is owned, controlled and financed by the government and their aim is to provide for society.

Question 18

features of public goods

Answer 18

1. non-rivalry: the consumption of these goods by one person doesn’t affect the amount available for the rest.
2. non-excludable: it is impossible for people to be excluded from benefiting from these goods

Question 19

merit goods

Answer 19

goods that are under-consumed but are still financed by the government because society needs them.

Question 20

range of businesses offered by the public sector

Answer 20

roads
social services
schools
cemeteries 
street lights

Question 21

industrialization

Answer 21

the growing importance of the secondary sector and the reduced importance of the primary sector
countries: china and India

Question 22

de-industrialization

Answer 22

the growing importance of the tertiary sector and the reduced importance of the secondary sector. in this scenario, machines would operate in the secondary sector which means humans are not needed.
countries: UK and USA

Question 23

expectations of industrialized countries

Answer 23

1. higher income
2. a variety of choices for consumers
3. better quality of products

Question 24

change in businesses due to industrialization

Answer 24

1. require finance for expansion
2. need for internal and external communication
3. need to provide better services for employees

Question 25

private sector businesses

Answer 25

sole trader/ proprietorship 
partnership
joint venture
franchise
limited companies 
social enterprise

Question 26

public sector businesses

Answer 26

government departments
public corporations
national industries