Purpose of business activity

Question 1

Factors of production

Answer 1

Factors of production are the resources needed to produce goods/services.
TYPES:
- Land (natural resources)
- Labour (efforts as input into the business)
- Capital (all the finance, machinery, and equipment needed)
- Enterprise (skill and risk taking of the person producing)

Question 2

Opportunity cost

Answer 2

It is the best alternative to choosing a given item

Question 3

Division of Labour/Specialization

Answer 3

When the production process is split up into different tasks and each worker performs only one task.

Question 4

Common Business objectives

Answer 4

• Make a profit (Sales revenue - Cost of sales)
• Increase added value (Selling price - cost of materials)
• Expand the business
• Achieve business survival
• Provide a service to a community

Question 5

Conflict of business objectives

Answer 5

When different groups of people have a point of view which goes against the business that has been set up.

Question 6

Stakeholders

Answer 6

Any person or group that is directly affected or interested in a business