business activity

Question 1

define a need and a want

Answer 1

need: a product or service that is essential for living
wants: a product or service that a human would like to have but is not essential for living

Question 2

describe the economic problem

Answer 2

we have unlimited wants but limited resources to produce the service or goods to satisfy those wants. this creates scarcity

Question 3

describe opportunity cost

Answer 3

the next best alternative given up by choosing another item

Question 4

definite scarcity

Answer 4

lacks of sufficient products to fulfil the total want of the populations

Question 5

what causes scarcity

Answer 5

the lack of factors of productions

Question 6

list all the factors of production

Answer 6

land- field and resources
labour - amount of ppl needed
capital- finance, machinery needed to make that product
enterprise- the person with skill and risk taking ability

Question 7

define specialisation

Answer 7

when ppl and business concentrate on what they do best

Question 8

why is specialisation more common now?

Answer 8

specialised machinery and technologies are now widely available
increasing competition means that businesses have to keep cost low
higher living standard

Question 9

benefits of specialisation (4)

Answer 9

less mistakes made
less and fast training
less time wasted traveling from one place to another
higher efficiency and output

Question 10

disadvantages of specialisation (4)

Answer 10

workers become bored, if absent no one can do the job, training may be expensive, product may be out of date and replaced by machine

Question 11

define division of labour

Answer 11

when the production process is split up into diff tasks and each workers performs one of these task - a from of specialisation

Question 12

define a business

Answer 12

combine factors of production to make products which satisfy peoples wants

Question 13

what does a business do?

Answer 13

combine scarce factors of production to produce good and services
produces goods and services which are needed to satisfy the needs and wants of the population
employs ppl and pays them wages to allow them to consume products made by other people

Question 14

define added value

Answer 14

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

Question 15

why do business needs to add value

Answer 15

to make profit and to pay for other cost

Question 16

ways to increase added value and their disadvantages

Answer 16

increase selling price but keep cost of materials same - create a higher quality image but the cost to do so may increase
reduce cost of materials but keep selling price the same - might lead to lower quality product

Question 17

methods to try in order to add value

Answer 17

make unique designs for product diff from competition
higher quality, more likely customers are willing to pay higher
do marketing, ppl pay for brands and packaging
the easier it is to buy the more willing customers will become