Business activity

Question 1

A need

Answer 1

Is a good or service essential for living.

Question 2

A want

Answer 2

Is a good or service which people would like to have, but which is not essential for living. People’s wants are unlimited.

Question 3

The economic problem

Answer 3

There exists unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity.

Question 4

Factors of production

Answer 4

Are those resources needed to produce goods or services. There are four factors of production and they are limited in supply.

Question 5

What are the four factors of production?

Answer 5

Capital, enterprise, land and labour.

Question 6

Scarcity

Answer 6

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

Question 7

Specialisation

Answer 7

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

Question 8

Opportunity cost

Answer 8

Is the next best alternate given up by choosing another item.

Question 9

Division of labour

Answer 9

Is when the production process is split up into different tasks and each worker performs one of these tasks. It is a form of specialisation.

Question 10

Business

Answer 10

An organisation that combines factors of production to make products (goods and services) which satisfy peoples wants.

Question 11

Added value

Answer 11

Is the difference between the selling price of a product and the cost of its bought-in materials and components.