Business activity

Question 1

Need

Answer 1

A need is a good or service essential for living

Question 2

Want

Answer 2

A want is a good or service people would like to have but is not essential for living

Question 3

Economic problem

Answer 3

there exists unlimited wants but only has limited resources to supply them to the population.

Question 4

Factors of production

Answer 4

are the resources needed to produce goods or services, there are 4 factors of production which are in limited supply (Land, Labor, Capital and Enterprise)

Question 5

Scarcity

Answer 5

The lack of sufficient products to fulfil the total wants of the population.

Question 6

Opportunity Cost

Answer 6

It is the next best alternative given up in order to chose another item

Question 7

Specialisation

Answer 7

Occurs when people and businesses concentrate on what they are best at.

Question 8

Division of labor

Answer 8

Is when the production process is split into different tasks and each worker performs one of these tasks.

Question 9

Adv and Disadv of division of labor

Answer 9

Ads:

• Workers are trained for 1 specific task, increases efficiency and output.
• Less time wasted from moving
• Cost is less, as only few skills need to be taught

Dis:

• Workers could get bored
• If a worker is absent, no one to fill his place.

Question 10

Business

Answer 10

Combines factors of production to make goods or services.

Question 11

Added value

Answer 11

Is the value that is kept as profit, it’s the difference between the cost of brought in items from the selling price of the product.

Question 12

How could a business Add value? (Elaborate)

Answer 12

• Increase the selling price of a product and keep the brought in material cost the same
• Reduce the brought in material cost and keep the selling price the same.