Business Activity

Question 1

What is business activity?

Answer 1

The process of producing goods and services to satisfy customer demand.

Question 2

define the needs of the customer.

Answer 2

a good or service which is essential to living

Question 3

define the wants of the customer.

Answer 3

a good or service which people would like, but is not essential for living.

Question 4

define economic problem.

Answer 4

unlimited wants cannot be met because there are limited factors of production and this leads to scarcity.

Question 5

what is the factors of production

Answer 5

The resources needed to produce goods and services

Question 6

land

Answer 6

is all natural resources such as minerals, ores, fields, oil and forests

Question 7

labour

Answer 7

is the number of people available to work

Question 8

capital

Answer 8

is machinery, equipment and finance needed for the production of goods and services.

Question 9

enterprise

Answer 9

is the people prepared to take risks of setting up the businesses (they are also called entrepreneurs.

Question 10

scarcity

Answer 10

there are not enough goods and services to meet the wants of the population

Question 11

opportunity cost

Answer 11

the benefit that could have been gained from an alternative use of the same resources.

Question 12

specification

Answer 12

people and businesses concentrate on what they are best at

Question 13

division of labour

Answer 13

production process is being divided into separate tasks and each employee does just one of those tasks

Question 14

consumer goods

Answer 14

products that are sold to the final consumer. they can be seen, touched and held

Question 15

consumer services

Answer 15

products which are sold to the public, but they cannot be seen nor touched. they are therefore, intangible

Question 16

capital goods

Answer 16

products that are sold to other companies to help them with their production process.

Question 17

what is the process of adding value?

Answer 17

taking in raw materials and turning them into a good or service which is then sold to consumers at a price greater than the cost of the raw materials used in their production

Question 18

how do businesses increases added value?

Answer 18

added value isnt the same as profits. if the increase in added value is greater than the cost of achieving it. That’s when profits will rise.

Question 19

the types of methods used to increase added value.

Answer 19

-Branding
-Excellent service quality
-Product features
-Convenience

Question 20

how does branding increase added value?

Answer 20

Branding increases added value because people want to or feel they should buy the item from this particular company.

Question 21

how does excellent service quality increases added value?

Answer 21

The cost of the materials will be very similar, but the personalised service increases the added value.

Question 22

how does product features increases added value?

Answer 22

Products that have more features and functions than similar products on the market will allow the producer to charge a higher price.

Question 23

how does convenience increase added value?

Answer 23

many consumers lead busy lives and they are often prepared to pay higher price for goods and services which they can have immediately or which can save their time.