Basic Economic Concepts and Business Operations
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Questions and Answers

What is a need?

A good or service essential for living.

What is a want?

A good or service which people would like to have but which is not essential for living.

What does the economic problem refer to?

It results from unlimited wants but limited resources.

What are factors of production?

<p>The resources needed to produce goods or services.</p> Signup and view all the answers

What is scarcity?

<p>The lack of sufficient products to satisfy the total wants of the population.</p> Signup and view all the answers

What is opportunity cost?

<p>The next best alternative given up by choosing another item.</p> Signup and view all the answers

What is division of labor?

<p>When the production process is split up into different tasks.</p> Signup and view all the answers

What do businesses do?

<p>Combine factors of production to make products that satisfy people's wants.</p> Signup and view all the answers

What are business objectives?

<p>The aims or targets that a business works towards.</p> Signup and view all the answers

What is value added?

<p>The difference between the selling price of a product and the cost of bought-in materials.</p> Signup and view all the answers

What is a stakeholder?

<p>Any person or group with direct interest in the performance and activities of a business.</p> Signup and view all the answers

What is the primary sector?

<p>Extracts and uses the natural resources of the Earth.</p> Signup and view all the answers

What is the secondary sector?

<p>Manufactures goods using the raw materials provided by the primary sector.</p> Signup and view all the answers

What is the tertiary sector?

<p>Provides services to consumers and other sectors of industry.</p> Signup and view all the answers

What does de-industrialization refer to?

<p>A decline in the importance of the secondary sector industry in a country.</p> Signup and view all the answers

Study Notes

Basic Economic Concepts

  • Needs are essential for survival, while wants are desired but not essential. Wants are unlimited.
  • The Economic Problem arises from unlimited wants and limited resources, leading to scarcity.
  • Factors of Production are resources used for production and are in limited supply. These include land, labor, capital and enterprise.
  • Scarcity means there aren't enough goods and services to satisfy everyone's wants.
  • Opportunity Cost is the value of the best alternative forgone when making a choice.

Business Operations

  • Businesses combine factors of production to produce goods and services that satisfy wants.
  • Business Objectives are goals that businesses aim to achieve.
  • Value Added is the difference between a product's selling price and the cost of materials and components. This represents the value a business contributes to the product.
  • Stakeholders are individuals or groups with a direct interest in the business's activities and performance.

Sectors of the Economy

  • The Primary Sector extracts and utilizes Earth's natural resources.
  • The Secondary Sector manufactures goods using raw materials from the primary sector.
  • The Tertiary Sector provides services to consumers and other sectors.
  • De-industrialization is a decline in the importance of the secondary sector in a country's economy.

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Description

This quiz covers fundamental economic concepts such as needs, wants, scarcity, and opportunity cost, along with key business operations. It explores how businesses utilize factors of production to achieve their objectives and the role of stakeholders. Test your knowledge of these essential principles in economics and business.

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