A. From the following list, decide which items are human needs and which are wants: (explain briefly the reasons for your decisions)
- Luxury house
- clean water
- designer jeans
B. Explain what is meant by scarcity when referring to the economic problem.
C. List the four factors of production and explain briefly why each is necessary for production to take place.
D. Explain, with the aid of an example, what the term of opportunity cost means to a consumer.
E. Give two other examples of opportunity cost that would affect groups other than consumers.
F. Explain what is meant by division of labour.
G. Why is a business likely to increase output if it adopts division of labour?
H. List four tasks involved in the making of cakes that coukd be given to different workers through division of labour.
I. State three benefits to society of business activity.
J. What is meant by added value?
K. Identify and explain two ways in which a retailer of clothes could add value to their products. (Hint: the answer is not to buy more expensive clothes for the shop as this will not necessarily add value.)
- Luxury house- want
- shelter- need, people need somewere to live and protece themselves
- coca-cola- want
- car- want
- clean water- need, the human needs to drink water and also clean themselves .
- designer jeans- want
- clothing- need people need clothing to protect themselves of the wether or other factors.
B. Scarcity is the main problem in economy. This means that resources are limited and sometimes not enough and this bring problems to people who can’t even afford for their needs.
C. The four factors of production are:
- Land, all natural resources neede by men.
- Labour, number of available people.
- Capital, the equipment and the finance.
- Enterprice, skill and risk which someone takes.
D. The opportunity cost is the best alternative we have by choosing another object. For example: Someone cancels a party in order to study for a test. The opportunity cost is the party.
E. 1Ex: The president decides to spend money on schools instead that spending it in repairing streets.
2Ex:The mayor of a school decides to move the school from the city to the countryside.
F. Division of labour is a way of working. This method consists on teaching the workers different labours so only one man can do different things.
G. Division of labour most of the time increases output because you need less workers and every worker can do everything.
- Buy the ingredients.
- Make the cake.
- Cook the cake in the oven.
- Sell the cake.
- You can earn more money.
- You can organize better your money.
- The economy will get better with it.
J. The added value in the money a seller adds to the product, in this way he can receive profit.
K. 1- You can buy cheaper materials so you spend less money in materials.
2- You can use the division of labour, in this way you have to spend less money in workers.