Business Studies: The Purpose Of Business Activity Quiz #2

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| By Katecambel

Katecambel

Community Contributor

Quizzes Created: 6 | Total Attempts: 4,578

Questions: 7 | Attempts: 1,274 | Updated: Mar 22, 2023

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Questions and Answers

1.

What is meant by scarcity?
- A.
  
  Choosing the next best alternative given up by choosing another item
- B.
  
  The lack of sufficient products to fulfill the total wants of the population
- C.
  
  Need to produce goods or services
- D.
  
  Next best alternative given up by choosing another item
Correct Answer
B. The lack of sufficient products to fulfill the total wants of the population

Explanation
Scarcity refers to the lack of sufficient products to fulfill the total wants of the population. This means that there is a limited supply of goods and resources, while the demand or wants of the population are unlimited. As a result, people must make choices and prioritize their needs and wants, as they cannot have everything they desire. This concept of scarcity is a fundamental principle in economics and influences decision-making and resource allocation.

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1
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2.

What is meant by the division of labor?
- A.
  
  Customers who owe money to the business
- B.
  
  Total cost of production divided by total output
- C.
  
  The production process is split up into different tasks and each worker performs one of these tasks
- D.
  
  Level of sales at which total costs equal total revenue
Correct Answer
C. The production process is split up into different tasks and each worker performs one of these tasks

Explanation
The division of labor refers to the practice of dividing the production process into different tasks and assigning each worker to perform a specific task. This allows for specialization and efficiency in the production process as workers become skilled and efficient in their assigned tasks. By dividing the labor, tasks can be completed more quickly and efficiently, leading to increased productivity and overall output.

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3.

Define value added.
- A.
  
  Payment for work usually paid weekly
- B.
  
  The income to a business during a period of time from the sale of goods or services
- C.
  
  The difference between the selling price of a product or service and the cost of inputs such as materials and components
- D.
  
  The surplus after total costs have been subtracted from sales revenue
Correct Answer
C. The difference between the selling price of a product or service and the cost of inputs such as materials and components

Explanation
Value added refers to the difference between the selling price of a product or service and the cost of inputs such as materials and components. It represents the additional value created by a business through its production process. This measure helps to determine the economic contribution made by a company by quantifying the amount of value it adds to the raw materials or inputs it uses. It is calculated by subtracting the cost of inputs from the selling price, and it represents the surplus or profit generated by the business after deducting all costs.

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4.

Which one is not a factor of production?
- A.
  
  Resources
- B.
  
  Labour
- C.
  
  Enterprise
- D.
  
  Land
Correct Answer
A. Resources

Explanation
The term "resources" is a broad and inclusive term that encompasses all the factors of production, including labor, enterprise, and land. Therefore, it cannot be considered as something that is not a factor of production.

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5.

What is a meant by business objectives?
- A.
  
  Plans for the future containing numerical or financial targets
- B.
  
  A management structure in which most decisions are taken at the centre
- C.
  
  The financial records of a firm's transactions
- D.
  
  The aims or targets that a business works towards
Correct Answer
D. The aims or targets that a business works towards

Explanation
Business objectives refer to the aims or targets that a business works towards. These objectives outline the specific goals and outcomes that a business wants to achieve within a certain timeframe. They provide direction and purpose to the organization and guide decision-making and resource allocation. Business objectives can be both qualitative and quantitative, encompassing various areas such as financial performance, market share, customer satisfaction, innovation, and sustainability. By setting clear objectives, businesses can align their efforts and measure their progress towards achieving their desired outcomes.

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6.

The primary purpose of a business is to maximize profits for its owners or stakeholders while maintaining corporate social responsibility.
- A.
  
  True
- B.
  
  False
Correct Answer
A. True

Explanation
The statement is true because businesses exist to generate profits for their owners or stakeholders. However, it is also important for businesses to maintain corporate social responsibility, which means taking into account the impact of their actions on society and the environment. This includes ethical business practices, sustainable operations, and contributing to the well-being of the community. By balancing profitability with social responsibility, businesses can ensure long-term success and positive impact.

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7.

Services are tangible actions that can be stored.
- A.
  
  True
- B.
  
  False
Correct Answer
B. False

Explanation
Services are intangible actions that cannot be stored, but goods are tangible actions that can be stored as well as used.

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Current Version
Mar 22, 2023

Quiz Edited by
ProProfs Editorial Team
Apr 23, 2010

Quiz Created by
Katecambel

Business Studies: The Purpose Of Business Activity Quiz #2

What is meant by scarcity?

What is meant by the division of labor?

Define value added.

Which one is not a factor of production?

What is a meant by business objectives?

The primary purpose of a business is to maximize profits for its owners or stakeholders while maintaining corporate social responsibility.

Services are tangible actions that can be stored.