teaching ideas, including further activities with answers and topics for discussion

Answers to Worksheet 1

Business activity basics

Business activity 1 Needs – items that we must have in order to live.

Wants – items we would like to have, but are not essential. 2 a False – the purpose of business activity is to produce goods and services that people need and want. b Tru e c False – specialisation only tries to make the best use of limited resources. 3 The economic problem is trying to meet unlimited wants but only having limited resources to produce all the goods and services to meet these wants. This leads to scarcity. Factors of production 4 Factor Description Example

Land Space and resource obtained from the land Fish from the sea Labour Pe ople who make things Ma chine operator Capital Bu ildings and inventory Bu y new machinery Enterprise People who take risks to bring about activity Investors

5 Buying a new building increases a business’s capital. Added value 6

$3500

$2000 Added value

Cost of bought in materials $500 profit

$1000 labour costs

Sectors 7 Most economies are made up of two main sectors. The private sector includes businesses that are owned and run by individuals. The public sector is made up of organisations owned and run by the state. There is also a third sector, known as the non-profit-making or voluntary sector, which includes organisations such as charities.