Business Studies: The Purpose Of Business Activity Quiz #2

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Quizzes Created: 6 | Total Attempts: 4,639
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  • 1/7 Questions

    What is meant by the division of labor? 

    • Customers who owe money to the business
    • Total cost of production divided by total output
    • The production process is split up into different tasks and each worker performs one of these tasks
    • Level of sales at which total costs equal total revenue
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About This Quiz

Business Studies: The Purpose of Business Activity Quiz #2 explores fundamental business concepts such as scarcity, division of labor, and business objectives. It assesses understanding of factors of production and the role of profit maximization in corporate social responsibility.

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  • 2. 

    What is meant by scarcity? 

    • Choosing the next best alternative given up by choosing another item

    • The lack of sufficient products to fulfill the total wants of the population

    • Need to produce goods or services

    • Next best alternative given up by choosing another item

    Correct Answer
    A. 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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  • 3. 

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

    • True

    • 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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  • 4. 

    Services are tangible actions that can be stored.

    • True

    • False

    Correct Answer
    A. 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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  • 5. 

    Define value added. 

    • Payment for work usually paid weekly

    • The income to a business during a period of time from the sale of goods or services

    • The difference between the selling price of a product or service and the cost of inputs such as materials and components

    • The surplus after total costs have been subtracted from sales revenue

    Correct Answer
    A. 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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  • 6. 

    Which one is not a factor of production? 

    • Resources

    • Labour

    • Enterprise

    • 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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  • 7. 

    What is a meant by business objectives? 

    • Plans for the future containing numerical or financial targets

    • A management structure in which most decisions are taken at the centre

    • The financial records of a firm's transactions

    • The aims or targets that a business works towards

    Correct Answer
    A. 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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  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 23, 2010
    Quiz Created by
    Katecambel
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