Grade 8 Business Studies Questions and Answers

What is the difference between a want and a need?

A need is essential for survival, like food and shelter; a want is desirable but not necessary, like a new phone.

List four examples of needs.

Food, Water, Shelter, Clothing

List four examples of wants.

A new car, A designer handbag, A vacation to an exotic island, A high-end gaming console

What is the fundamental economic problem?

The fundamental economic problem is scarcity, the condition of having unlimited wants but limited resources.

How does scarcity affect choices individuals and businesses make?

Scarcity forces choices about resource allocation; every choice has an opportunity cost.

What is defined as business activity?

Business activity is any action taken by an organization to produce goods or services that satisfy consumer wants and needs.

What are the four factors of production?

Land, Labour, Capital, Enterprise.

Give three examples of 'land' as a factor of production.

Farmland used to grow crops, Oil reserves, A shop building.

Give three examples of 'labour' as a factor of production.

A factory worker, A teacher, A shop assistant.

Give three examples of 'capital' as a factor of production.

A factory machine, A delivery truck, A computer.

What is the role of 'enterprise' in production?

Enterprise involves taking risks and organizing the other production factors to create goods or services.

Explain how opportunity cost applies to a business decision.

The opportunity cost is the value of the next best alternative forgone when a business makes a choice.

Why is profit an important motivator for businesses?

Profit is the financial reward for risk-taking and is essential for business survival and growth.

How can a business add value to its products or services?

By improving quality, offering unique features, providing excellent customer service, or building a strong brand.

Why is understanding the difference between needs and wants important for a business?

It helps businesses target products effectively; focusing on needs ensures demand, while wants allow for differentiation.