Introduction to business activity

Answers to revision questions

1 Needs are items that we must have in order to live, such as food or shelter. Wants are items that we would like to have, although they are not essential, for example the latest pair of fashionable shoes. 2 The main purpose of business activity is to make and supply goods and services that people need or want.
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private sector business profit, survival, growth public enterprise job creation non-profit-making organisations provide a specific social need, such as helping provide wells for local villages

4 scarcity refers to the problem of the limited amount of resources that are available compared to the unlimited wants of people who use them opportunity cost the cost of something in terms of the next best thing value added the difference between the sales value of the product and the cost of all the resources used to produce the product 5 The four factors of production are: land, labour, capital and enterprise. 6 A transport company would have: land the site of the company labour workers capital equipment such as delivery vehicles enterprise the managers who organise and control operations.

Unit 1 Cambridge University Press 2010