Business activity 1.1

Question 1

What are needs

Answer 1

Good or service essential for living

Question 2

What are wants

Answer 2

Good or service that is not necessary for living but people would like to have

Question 3

What is Scarcity

Answer 3

Lack of sufficient products to fulfil all the want of population

Question 4

What is opportunity cost

Answer 4

Best alternative given up by choosing another item

Question 5

What is specialisation and why is it important

Answer 5

Specialisation is when people concentrate on what they are best at.
It is important because factors of production such as land or labour are in limited supply so the resources need to be used in the most efficient way possible

Question 6

What is the purpose of business activity

Answer 6

Combines scarce factors of production to produce goods and services
Produce goods and services to satisfy needs and wants of the population
Employed people as workers and pay wage

Question 7

How can added value be increased

Answer 7

Increase selling price and keep cost of materials same

Keep selling price decrease cost of materials