Grade 8 Business Studies Questions and Answers

Business Concepts

Differences Between Wants and Needs

• Need: Essential for survival (e.g., food, water, shelter, clothing)

• Want: Desirable but not necessary for survival (e.g., a new phone, vacation, designer clothes)

Examples of Needs

• Food

• Water

• Shelter

• Clothing

Examples of Wants

• A new car

• A designer handbag

• A vacation to an exotic island

• A high-end gaming console

Fundamental Economic Problem

• Scarcity: Condition of having unlimited wants but limited resources to satisfy them.

Scarcity and Choices

• Scarcity forces individuals and businesses to make choices about resource allocation.

• Opportunity Cost: The value of the next best alternative forgone when making a choice (e.g., choosing a PlayStation over a bicycle).

Business Activity

• Definition: Any action taken by an organization to produce goods or services that satisfy consumer wants and needs.

Factors of Production

• Land: Natural resources used in production.

• Labour: Human effort involved in production.

• Capital: Man-made resources used in production.

• Enterprise: Skills and initiative to organize the other factors.

Examples of Factors of Production

Land

• Farmland used to grow crops

• Oil reserves

• A shop building

Labour

• A factory worker

• A teacher

• A shop assistant

Capital

• A factory machine

• A delivery truck

• A computer

Role of Enterprise

• Involves taking risks and organizing production factors.

• Example: Elon Musk for Tesla; Volkswagen for Ferrari.

Opportunity Cost in Business Decisions

• If a business invests in new equipment, the opportunity cost is the value of the next best alternative use of that money (e.g., investing in marketing).

Importance of Profit

• Profit: Financial reward for taking risks in business.

• Essential for business survival and growth.

Adding Value to Products/Services

• Improving quality

• Offering unique features

• Providing exceptional service