Business activity, economic sector 1.1 + 1.2

Question 1

land

Answer 1

Natural resources that can be obtained from nature

Question 2

labour

Answer 2

Number of people available to make products

Question 3

enterprise

Answer 3

risk taking ability of the person who brings other factors of production together to produce a good/service. Reward is profit from the business

Question 4

capital

Answer 4

Finance, machinery and equipment needed for the manufacture of goods

Question 5

added value

Answer 5

difference between the selling price and the cost of materials

Question 6

how can added value be increased

Answer 6

Reducing cost of production (products may be poor quality)

Raising prices (customer loss may occur)

Branding

Special features

Provide premium services

Question 7

opportunity cost

Answer 7

the next best alternative given up by choosing another item

Question 8

primary sector

Answer 8

extracts and uses natural resources of Earth to produce raw materials used by other businesses

Question 9

secondary sector

Answer 9

manufacture goods using raw materials provided by the primary sector

Question 10

tertiary sector

Answer 10

provides services to the consumers

Question 11

private sector

Answer 11

Private individuals own and run the business and not the government. Aim is usually to generate profit

Question 12

public sector

Answer 12

Government owns and runs the business. Aim is to provide essential goods and services eg. school, hospital

Question 13

factors of production

Answer 13

resources needed to produce goods or services.

Question 14

scarcity

Answer 14

the lack of sufficient products to fulfil the total wants of the population

Question 15

Define business

Answer 15

An organisation that combines factors of production to make products which satisfy peoples wants.

Question 16

economic problem

Answer 16

Unlimited wants but limited resources to produce goods and services to satisfy those wants. Creates scarcity

Question 17

specialisation

Answer 17

People or businesses concentrate on what they are best at

Question 18

specialisation pros

Answer 18

Workers are trained in a specific task which increases efficiency

Saves time and energy - production is faster

Quicker to train workers as they only focus on one task

Workers can develop skills as they do the same task repeatedly and master it

Question 19

specialisation cons

Answer 19

Boring to do the same task repeatedly

If one worker is absent and no one else can do the job, entire production might halt

Question 20

mixed economy

Answer 20

has both a private and public sector