Business Studies: Activity and Production Factors
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Questions and Answers

What is the main purpose of specialization in a business context?

  • To reduce the need for training and development.
  • To increase efficiency by assigning tasks to skilled individuals. (correct)
  • To create a more flexible and adaptable workforce.
  • To improve worker morale by providing variety in tasks.

Which of the following is NOT a disadvantage of specialization?

  • Reduced need for diverse skills in the workforce. (correct)
  • Increased dependence on specific workers.
  • Potential for monotony and boredom.
  • Increased demand for higher salaries.

What does "added value" refer to in a business context?

  • The difference between the cost of raw materials and the selling price. (correct)
  • The amount of time spent manufacturing a product.
  • The profit margin on a product.
  • The marketing costs associated with a product.

How does reducing the cost of production increase added value?

<p>It increases the difference between the cost of production and the selling price. (D)</p> Signup and view all the answers

What is one potential problem associated with increasing prices to raise added value?

<p>It may reduce demand for the product, as customers seek cheaper alternatives. (C)</p> Signup and view all the answers

What is a business, according to the text?

<p>An entity that uses resources to produce goods and services to meet human needs. (B)</p> Signup and view all the answers

Which of the following is a potential way to reduce the cost of production?

<p>Sourcing raw materials from cheaper suppliers. (A)</p> Signup and view all the answers

What is the main challenge addressed by business activities in relation to scarcity?

<p>Producing goods and services that meet consumer demand. (A)</p> Signup and view all the answers

What is the main economic problem that businesses face?

<p>Unlimited wants and limited resources (B)</p> Signup and view all the answers

What is the term used for the next best alternative forgone when a choice is made?

<p>Opportunity cost (A)</p> Signup and view all the answers

Which of the following is NOT a factor of production?

<p>Government regulation (C)</p> Signup and view all the answers

What is the reward for the factor of production known as 'labor'?

<p>Wages/salary (B)</p> Signup and view all the answers

What is the term used to describe the situation when an individual or organization focuses on a specific task they are best at?

<p>Specialization (D)</p> Signup and view all the answers

Which of the following is an example of a 'want' rather than a 'need'?

<p>Car (A)</p> Signup and view all the answers

What is the reward for the factor of production known as 'capital'?

<p>Interest (A)</p> Signup and view all the answers

What is the relationship between scarcity, choice, and opportunity cost?

<p>Scarcity leads to choice, which results in opportunity cost (D)</p> Signup and view all the answers

Flashcards

Business

The study of economics and management.

Need

A good or service essential for living, like food or water.

Want

A good or service people would like but is not necessary for living.

Scarcity

A situation with unlimited wants but limited resources available.

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Opportunity Cost

The next best alternative forgone when making a choice.

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Factors of Production

Resources required to produce goods or services, including land, labor, capital, and enterprise.

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Specialization

Concentration on a task at which a person or organization excels.

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Land (Factors of Production)

Natural resources used for production, rewarded with rent.

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Efficiency in Work

Improved productivity by training workers in specific tasks.

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Monotony

Boredom from repetitive tasks that can arise in specialization.

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Labour Turnover

The rate at which workers leave and are replaced in a business.

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Business Activity

An organization using resources to create goods/services for needs.

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Added Value

The difference between the cost of materials and the selling price of a product.

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Increasing Added Value

Methods include reducing production costs or raising prices.

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Study Notes

Business Activity

  • "Business" is a familiar concept, integral to daily life.
  • Business studies examine economics and management.
  • Need: Essential goods/services (water, food, shelter)
  • Want: Desirable but non-essential items (cars, movies)
  • Scarcity: Unlimited wants, limited resources to meet those wants.
  • Scarcity leads to choices and opportunity cost.
  • Opportunity cost: Value of the next best alternative forgone when a choice is made.
  • Example: Government must choose between a road or a hospital, the opportunity cost is the benefits of the road.
  • Factors of Production:
    • Resources to produce goods/services.
    • Classified into Land, Labour, Capital, and Enterprise.

Factors of Production

  • Land: Natural resources (minerals, forests, oil, gas). Reward: Rent
  • Labour: Physical and mental effort, wage/salary.
  • Capital: Money, machinery, equipment for production, reward: interest.
  • Enterprise: Risk-taking, combining factors to produce goods/services. Reward: Profit.

Specialization

  • Specialization: Focusing on specific tasks; increases efficiency.
  • Advantages:
    • Skilled workers
    • Efficiency
    • Time savings
    • Skill development
  • Disadvantages:
    • Monotony/boredom
    • High labour turnover (staff leaving)
    • Over-dependency on a single employee

Purpose of Business Activity

  • Businesses use resources to create goods/services, satisfying consumer needs and wants.
  • Solving the problem of scarcity with available resources.

Added Value

  • Value added to raw materials through production.
  • Difference between selling price and cost of materials.
  • Higher added value leads to higher price.
  • Methods to Increase Added Value:
    • Reduce production costs.
    • Increase prices.
  • Practical examples:
    • Jewellery store: Attractive packaging, shop displays, skilled staff.

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Related Documents

1.1 – Business Activity PDF

Description

Explore the foundations of business activities with a focus on essential and non-essential goods, scarcity, and opportunity cost. Understand the factors of production including land, labor, capital, and enterprise. This quiz assesses your grasp of key concepts in business studies essential for economics and management.

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