Transforming Resources Into Goods And Services

Question 0

What is the transformation process?

Answer 0

The process where resources are converted into goods and services.

Question 1

What are the factors of production?

Answer 1

Land
Labour
Capital
Enterprise

Question 2

How are inputs affected by the transformation process?

Answer 2

Labour and enterprise -Unaffected
Capital -Will eventually run out
Land -is used up in the process, so businesses try to recycle

Question 3

What is adding value?

Answer 3

The process of increasing the worth of resources by modifying them.

Question 4

What is the adding value equation?

Answer 4

Sales revenue - Cost of bought in materials, components, services

Question 5

How can a business improve the efficiency of factors of production and add value?

Answer 5

Training workers
Improving fertility of land
Encouraging entrepreneurs
Using renewable resources
Increasing investment in capital

Question 6

How can a business add value by encouraging the customers to pay higher prices or buy more?

Answer 6

Producing high quality products
Offering good after-sales service
Using marketing to persuade customers