Business Activity and Economic Concepts

The video tutorial covers fundamental economic concepts such as needs, wants, scarcity, and opportunity cost. It explains how needs are essential for living, while wants are non-essential desires. Scarcity arises when resources are insufficient to meet unlimited wants. Opportunity cost involves choosing between alternatives. The tutorial also introduces the factors of production: land, labor, capital, and enterprise, and discusses the importance of specialization in maximizing efficiency. The purpose of business activity is to satisfy wants using these factors. Finally, the concept of adding value in business is explored, highlighting its role in profitability.

What is the primary difference between a need and a want?

• Neither needs nor wants are essential for survival.

• Needs and wants are both essential for survival.

• Wants are essential for survival, while needs are not.

• Needs are essential for survival, while wants are not.

How is scarcity defined in economic terms?

• The abundance of resources to meet all wants.

• The equal distribution of resources.

• The surplus of goods and services.

• The lack of resources to fulfill unlimited wants.

What does opportunity cost refer to?

• The best alternative given up when making a choice.

• The cost of producing a good or service.

• The total cost of all alternatives.

• The financial cost of a decision.

Which of the following is NOT a factor of production?

• Capital

• Land

• Labor

• Technology

What role does enterprise play in the factors of production?

• It provides natural resources.

• It supplies labor.

• It offers financial capital.

• It organizes resources and takes risks.

Why is specialization important in economics?

• It increases the variety of products.

• It allows people to perform at their best in chosen areas.

• It eliminates economic problems.

• It reduces the need for factors of production.

How does specialization benefit businesses?

• By eliminating competition.

• By diversifying product lines.

• By reducing production costs.

• By increasing the efficiency of resource use.

What is the main purpose of business activity?

• To create state-owned enterprises.

• To eliminate the need for specialization.

• To reduce the number of privately owned businesses.

• To satisfy people's wants using production factors.

How can a business add value to its products?

• By increasing the cost of materials.

• By reducing the quality of the product.

• By enhancing the product's image.

• By decreasing the selling price.

What is the relationship between value addition and profit?

• Value addition only affects the cost of materials.

• Value addition is essential for recovering costs and increasing profit.

• Value addition has no impact on profit.

• Value addition decreases profit.