Adrian Chimusingo 1NB

Business studies holiday homework

1. With the aid of examples explain the three stages of development in an economy.
a. Primary sector: This industry extracts natural resources of the earth which are used to
produce raw materials.
b. Secondary sector: This industry takes raw materials from the primary sector which then
processes these materials to semifinished and finished goods.
c. Tertiary sector: this sector provides services or aids to trade to both consumers and
other businesses in other sectors of the industry.

2. Five benefits of specialisation to a firm

a. Less time is wasted switching jobs by an individual.
b. Machinery also helps jobs and can operate 24/7
c. Specialised workers are good at one task and increases efficiency

3. a] Capital- This refers to finances and all man made resources used in the production of
goods and services.
Capital can come in the form of money or capital goods such as equipment, machinery,
factories, buildings and computer science.
The reward for capital is interest.

b] land – God given resources

c] labour- This refers to human’s physical and mental effort needed to produce goods or
services.

Labour include human skills, expertise and physical effort form workers

Labour can be classified as skilled, semi –skilled and unskilled

Workers are used to produce goods, provide services and manage or administrate the

business.

Examples of labour at Riverton academy include teachers, school heads, directors, cooks

and other ancillary staff

The reward for labour is wages or salaries

d] Enterprise - This refers to the skills and ability to take risks and form new businesses

Enterprise is also called entrepreneurship.

Entrepreneurs have the following attributes or characteristics

i. Risk taking – doing things even though success is not guaranteed

ii. Innovative or creative – ability to come up new products or business ideas

 iii. Hard working

iv. Ability to bounce back after failure

v. Self-motivated

vi. Multi-skilled – can handle a variety of business tasks

vii. Good communication skills

viii. Emotionally intelligent - can handle emotions and relationships

4.

Factors of production Reward

Land Rent
Labour Wages
Capital Interest
Enterprise Profit

5. Value addition is the difference between cost price and selling price of a product.
6. A firm can add value by advertising, creating a brand and providing customised services
7. Opportunity cost this is the next best alternative given up by choosing another item .
8. Specialisation is just like division of labour because this is when the factors of production are
split into different tasks and each specialised worker or machine performs one of these tasks