Test 1

Question 1

land

Answer 1

the natural environment needed for production

Question 2

labour

Answer 2

humans/work

Question 3

capital

Answer 3

any manmade thing used to make something else

Question 4

enterprise

Answer 4

the idea/intellect behind production
the ability to bring the other factors of production together

Question 5

reward for land

Answer 5

rental income for land owners

Question 6

reward for labour

Answer 6

wages and salaries from employment

Question 7

reward for capital

Answer 7

interest from savings and dividends from shares

Question 8

reward for enterprise

Answer 8

profits

Question 9

factors that shift a demand curve

Answer 9

1. income
2. preferences
3. price of other products

Question 10

factors affecting supply

Answer 10

1. costs of production
2. technology of production
3. the price of other related goods
4. government policy (taxes/subsidies)
5. firms’ expectations about future prices
6. size and nature of the industry
7. other factors

Question 11

business relevance of ped

Answer 11

1. sales forecasting
2. pricing policy
3. non-pricing policy

Question 12

determinants of ped

Answer 12

1. availability and closeness of substitutes
2. necessity or luxury item?
3. the relative expense of a product with respect to income/total expenditure
4. time period under consideration