IGCSE Business Studies 1.1-1.2 Business Activity Quiz

Which of the following is an example of a basic need?

• Smartphone

• Shelter

• Designer clothes

• Video games

Wants are defined as:

• Goods and services that are essential for survival

• Goods and services that are desired by customers but not essential

• Goods and services required by businesses

• Products used only by consumers

What is meant by scarcity?

• Unlimited resources for limited wants

• Limited resources for unlimited wants

• A shortage of goods in the market

• An increase in product prices

Opportunity cost refers to:

• The most expensive item purchased

• The next best alternative given up when making a decision

• The total cost of producing a product

• The cost of resources used by a business

Which of the following best describes specialization?

• Focusing on producing a range of goods

• Training workers in multiple skills

• Focusing on a specific task or activity to improve efficiency

• Reducing the variety of goods offered by a business

Businesses exist to:

• Increase product prices

• Provide goods and services to satisfy needs and wants

• Limit consumer choices

• Eliminate opportunity costs

What does adding value mean in business?

• Decreasing production costs

• Increasing the price of raw materials

• Increasing the difference between the cost of inputs and the price of the product

• Reducing the quality of products

Which of the following methods can increase added value?

• Using high-quality raw materials

• Reducing product prices significantly

• Eliminating advertising costs

• Lowering customer service standards

Why is specialization important in business?

• It increases the variety of goods produced

• It increases efficiency and productivity

• It reduces the need for skilled labor

• It ensures all workers perform multiple tasks

A bakery adding personalized designs to cakes is an example of:

• Decreasing value

• Adding value

• Opportunity cost

• Specialization