L1 Understanding Business Activity

Question 1

List some wants

Answer 1

Electronics
Football boots
A Pet

Question 2

List some needs

Answer 2

Water
Food
Shelter
Healthcare

Question 3

A brief explanation on why we can’t have everything we want

Answer 3

We might not have enough money for everything we want.

People always want what they can’t have, nothing is enough. “the grass is greener on the other side”

Question 4

What is scarcity

Answer 4

Scarcity is the lack of enough products to fulfill the total wants of the population.
The basic economic problem arises because people have unlimited wants but resources are limited.

Question 5

What are resources used to produce a good or provide a service called

Answer 5

Factors of Production.

Question 6

How many factors of production are there

Answer 6

4

Question 7

What are the 4 factors of production

Answer 7

Land
Labour
Capital
Enterprise

Question 8

Define Land briefly

Answer 8

Includes all-natural resources that are available for production.
e.g. wood, water, oil, fish etc

Question 9

Define Labour briefly

Answer 9

Includes the physical and mental effort of people used in production or the creation of products.
e.g. workers

Question 10

Define Capital briefly

Answer 10

Includes all manufactured products that are used in the production or creation of other products.
e.g. money, machinery, vehicles etc

Question 11

Define enterprise briefly

Answer 11

The management/organization and planning of the 3 other factors of production.