Business Studies Test #

1. Distinguish between needs and wants, giving two examples of each.
2. Explain how business activity creates an economic cycle in society.
3. Name and explain the four factors of production with a relevant example for each.
4. Sarah wants to open a bakery. She has found two potential locations – one in the city center with high rent but lots of foot traffic, or one in the suburbs with lower rent but fewer passing customers. Explain the concept of opportunity cost in this scenario.
5. Explain three advantages and two disadvantages of division of labor.
6. Explain why scarcity is a fundamental problem in economics and business.
7. John runs a smartphone repair shop. He has noticed that his workers take longer to complete repairs when switching between different types of phones. What concept could help him improve efficiency, and how?
8. Explain how businesses make decisions about resource allocation using the concept of opportunity cost.
9. What is capital as a factor of production? Give three examples.
10. Why is enterprise considered a separate factor of production from labor?
11. “The primary purpose of business activity is to make profit.” Discuss this statement.
12. How does scarcity affect business decision-making?
13. A clothing manufacturer is considering automating its production line. What factors of production are involved in this decision?
14. How might a restaurant apply division of labor? Include advantages and potential problems.
15. Explain how businesses can manage scarce resources effectively.
16. How does employment contribute to the business cycle?
17. Why is it important for businesses to understand the difference between needs and wants?
18. Maria has $10,000 to invest in her small business. She can either buy new equipment or hire an additional employee. Using the concept of opportunity cost, explain how she should approach this decision.
19. How has technology affected labor as a factor of production?
20. What qualities make enterprise an essential factor of production? Explain with examples.