Revision Unit 1

  • Here you will find the unit we studied with our teacher Mary Aragone, and an introducing video to the subject, business.

A. From the following list, decide which items are human needs and which are wants: (explain briefly the reasons for your decisions)

  • Luxury house: I decide, that this is a want because it isn’t something that a person must have. It’s something you wish for your pleasure.
  • shelter: This is a need by the reason that it is something that is needed in order to live.
  • coca-cola: This is a want for the reason that you can have other drinks instead of coca-cola, but that depends on what you like or desire.
  • car: This is a want as result that you don’t have buy  by car to travel, that’s why public transports exist and you don’t have to pay too much. But if you can afford to buy the car, it depends on what you like or prefer.
  • clean water: This is a need because all of us require clean water in order to survive.
  • designer jeans: This is a want for the reason that some people can afford to buy designer jeans and others can’t so they can buy clothes in a cheaper shop.
  • clothing: This is a need as result that you can’t be naked on the street and is something you require to protect you body from the cold.

B. Explain what is meant by scarcity when referring to the economic problem.

  • When we lack of resources to produce the goods and services to satisfy our wants this leads us to an economic problem which creates scarcity.

C. List the four factors of production and explain briefly why each is necessary for production to take place.

  • Land: This term is used to cover all of the natural resources provided by nature and includes fields and forests, oil, gas, metals, and other mineral resources.
  • Capital: This is the finance, machinery and equipment needed for the manufacture of goods.
  • Enterprise: This is the skill and the risk-taking ability of the person who brings the other resources or factors of production together to produce a good or service. For example, the owner of a business.  These people are called entrepreneurs.
  • Labour: This is the number of people available to make products.

D. Explain, with the aid of an example, what the term of opportunity cost means to a consumer.

  • When we have limited resources but so many wants we have to decide whether or not to buy a pair of trainers or spend the money on a new book for school.

E. Give two other examples of opportunity cost that would affect groups other than consumers.

  • For example, when we decide to buy a computer instead of a T.V. So the T.V becomes the opportunity cost.
  • Another example, when we decide to buy a house instead of buying a car. So the car becomes the opportunity cost.

F. Explain what is meant by division of labor.

  • Is when the production process is split up into different tasks and each worker performs one of these tasks. It is a form of specialisation.

G. Why is a business likely to increase output if it adopts division of labour?

  •  Workers are specialized in one task  and specialist in this and less time is wasted.


H. List four tasks involved in the making of cakes that could be given to different workers through division of labour.

  1. Joe buys the ingredients that the cake contains.
  2. George and Susan prepare the mixture.
  3. Juliet and Nick put the cakes in the oven.
  4.  When the cakes are finally cooked,  Collin take them out of the oven.
  5. At the end a transport business collects the cakes to deliver them to shops.

I. State three benefits to society of business activity.

  • People have unlimited wants.
  • Developing of societies.
  • People with their own plot of land and by their own efforts attempt to  survive and produce enough for their own needs.

J. What is meant by added value?

  • Is the difference between the selling price of a product and the cost of bought in materials and components.

K. Identify and explain two ways in which a retailer of clothes could add value to their products. (Hint: the answer is not to buy more expensive clothes for the shop as this will not necessarily add value.)

Example 1:

  • The selling price of a pair of jeans is $ 1.200
  • The value of the bought in woven materials, thread and other materials was $  400
  • The added value of the pairs of jeans was $ 800, but then she or he would have to pay other costs, such as taxes.

Example 2:

  • Joe buys 3 T-Shirts and each of  them costs $400, so the selling price is $1.200.
  • The value of the bought of materials is $200.
    • The added value of the pairs of jeans was $ 1000, but then she or he would have to pay other costs as he had paid with credit card.
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Una respuesta a Revision Unit 1

  1. Mery dijo:

    Good Feli, 6.25! Do not forget to heck the answers in my blog!

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