Cambridge IGCSE · Business Studies (0450)

Business activity: Practice Questions

5 multiple-choice questions marked as you go, and 5 written questions with worked solutions. All on Business activity.

10 questions24 marksFree, no account

Question 1

1 mark

A construction company uses a crane and several power tools to build an apartment block. Which factor of production do these items represent?

Question 2

1 mark

What is defined as the difference between the final selling price of a product and the cost of the bought-in materials and components used to make it?

Question 3

1 mark

Which of the following best defines the concept of scarcity?

Question 4

1 mark

What is the main purpose of business activity?

Question 5

1 mark

An entrepreneur starts a web design firm using their laptop, a rented office, and two hired coders. Which of the following correctly identifies the capital factor of production in this business?

Question 6

2 marks

Define the term added value and state one way a local bakery could increase it for its products.

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Question 7

4 marks

A high-tech textile factory uses automated looms and a team of software engineers to produce specialized fabrics. Identify two factors of production used by this business and explain how each contributes to the production process.

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Question 8

6 marks

A warehouse manager decides to replace manual fruit picking with robotic arms. Evaluate this shift in factors of production from labour to capital in terms of the business's long-term efficiency.

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Question 9

3 marks

The enterprise process is a sequence of stages that helps an entrepreneur move from an initial idea to evaluating its success.

(a) State two stages of the enterprise process.
(b) Explain why evaluating successes and failures is an essential final stage for any enterprise.

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Question 10

4 marks

A local organic farm utilizes land, labor, and specialized machinery to produce vegetables. The owner is an entrepreneur who manages the business and takes risks to expand into the neighboring town.

(a) Identify and explain two factors of production mentioned in the scenario.
(b) Explain how the economic problem of scarcity might affect the farmer's decision to allocate more land to carrot production instead of potato production.

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