Business Activity

Question 1

Need

Answer 1

A need is a good or service that is essential for living

Question 2

Want

Answer 2

A want is a good or service which people would like to have but is not essential for living. Peoples wants are unlimited.

Question 3

Economic Problem

Answer 3

The economic problem- 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

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

Question 5

What are the factors of Production

Answer 5

Land, Labour, Capital, Enterprise

Question 6

Land

Answer 6

the term is used to cover all of the natural resources provided by nature and includes fields and forests, oil, gas, metals and other mineral resources.

Question 7

Labour

Answer 7

This is the number of people available to make products

Question 8

Capital

Answer 8

This is the finance, machinery and equipment needed for the manufacture of goods

Question 9

Enterprise

Answer 9

This is the skill and risk-taking ability of the person who brings the other resources or factors of production together to produce a good or service, For example, the owner of a business. These people are called entrepreneurs.

Question 10

Scarcity

Answer 10

Scarcity is the lack of sufficient products to fulfil the total wants of the population

Question 11

Opportunity cost

Answer 11

Opportunity cost is the next best alternative given up by choosing another item

Question 12

Scarcity formula

Answer 12

Unlimited wants + limited resources = scarcity

Question 13

Specialisation

Answer 13

Specialisation occurs when people and business concentrate on what they are best at.

Question 14

Division of Labour

Answer 14

Division of Labour is when the production is split up into different tasks and each worker performs one of these tasks. It is a form of Specialisation

Question 15

Advantages of Division of Labour

Answer 15

Workers are trained in one task and specialise in this-this increases efficiency and output
Less time is wasted moving from one workbench to another

Question 16

Disadvantages of Division of Labour

Answer 16

Workers can become bored doing just one job-efficiency might fall
If one worker is absent and no one else can do the job production might be stopped

Question 17

Businesses

Answer 17

Businesses combine factors of production to make products (goods and services) which satisfy peoples wants

Question 18

Added value

Answer 18

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