IG Chapter 1 - Business Activity

________ is a good or service essential for living

• Want

• Desire

• Needs

• Factor of production

Mineral resources are an example of the factor of production of_________

• land

• labor

• capital

• enterprise

When making a choice the next best alternative we give up is referred to as__________

• factor of production

• opportunity cost

• scarcity

• specialisation

If one worker is absent from the production line and no one else can do their job, this is a disadvantage of______

• added value

• there being four factor of production

• people having unlimited wants

• division of labor

A business that makes ice cream buys ingredients at a cost of $1 per ice-cream. It spends $1000 on expenses and $200 per day on wages. The ice cream sells for $4 each and the business makes 1000 ice creams per day. How much is the added value of each ice cream?

• $1.80

• $3.00

• $2.00

• $2.50

People have limited wants

• True

• False

Scarcity results from limited resources and limited wants

• True

• False

Oil is an example of capital

• True

• False

Business are only owned by private individuals.

• True

• False

Added value can be increased by raising prices

• True

• False