1) Gowri is starting a business making fashion clothes. She is a good designer, but does not like stitching clothes. What factor of production is Gowri missing? a) Labour b) Capital c) Enterprise d) Land 2) Mohammed owns a bakery. He wants to increase the value added of his cakes. Which action is most likely to increase added value? a) Reducing the cost of flour b) Increasing the selling price while maintaining quality c) Using more expensive packaging d) Hiring additional staff 3) A local government decides to print more money to solve its country’s economic problems. What is the most likely outcome of this decision? a) Increased wages but the same amount of goods b) More goods being produced c) An increase in the supply of raw materials d) Decrease in the price of products 4) Sarah is deciding between buying a new phone or a laptop for her business. If she chooses the phone, what is the opportunity cost? a) The money spent on the phone b) The laptop c) The phone d) The cost of phone maintenance 5) Ali works as a carpenter but decides to open his own furniture business. Which factor of production is Ali contributing to as a business owner? a) Labour b) Capital c) Enterprise d) Land 6) A business reduces the number of staff involved in making a product to save money. What is the most likely effect of this change? a) Lower labour costs, but possibly reduced quality b) Higher costs but improved quality c) Reduced output but higher efficiency d) Increased sales but lower profits 7) A government is considering building a new road or a new hospital. If the road is built, what is the opportunity cost? a) The money spent on the road b) The hospital c) The road d) The salaries of construction workers 8) Jane's café increased its prices by 10% but saw no decline in the number of customers. What does this indicate? a) Jane added value to her products b) Jane's costs have decreased c) Jane's products are considered necessities d) Jane's products are of poor quality 9) A company specialising in manufacturing electronics decides to outsource its customer service operations. Which factor of production is being affected the most? a) Labour b) Land c) Capital d) Enterprise 10) Kevin’s bakery has increased sales by offering customers higher-quality packaging for his cakes. What business concept is being applied? a) Reducing labour costs b) Adding value c) Opportunity cost d) Specialisation 11) A company decides to train workers on a specific task rather than multiple tasks. Which of the following is an example of this? a) Opportunity cost b) Specialisation c) Enterprise d) Added value 12) Emily’s factory is considering switching from handmade goods to machine production. What will likely increase as a result of this change? a) Specialisation b) Capital needs c) Enterprise needs d) Labour needs 13) A business increases the selling price of a product without changing the quality or cost of materials. What business concept does this relate to? a) Specialisation b) Added value c) Scarcity d) Opportunity cost 14) A government raises taxes to increase public spending. What effect will this likely have on businesses? a) Increase in profits b) Increase in costs c) Decrease in production d) Increase in exports 15) Michael decides to open a furniture manufacturing business but lacks the funds to buy the necessary equipment. Which factor of production does he need? a) Land b) Labour c) Enterprise d) Capital 16) An online retailer reduces the cost of its packaging while keeping its prices the same. What is the most likely effect of this action? a) Increased sales b) Decreased added value c) Increased added value d) Higher costs 17) A smartphone company decides to cut down on the cost of materials to increase profits. Which of the following is a potential risk of this strategy? a) Reduced added value b) Increased sales c) Higher opportunity cost d) Increased quality 18) The government decides to increase the minimum wage. What impact could this have on businesses? a) Higher profits b) Lower labour costs c) Higher labour costs d) Reduced output 19) Sophia’s business is considering outsourcing its production to reduce costs. What business factor is most likely being considered? a) Labour b) Land c) Capital d) Enterprise 20) A company wants to expand its factory to produce more goods. Which factor of production does this relate to? a) Enterprise b) Labour c) Land d) Capital

AO2 (Application) - Year 10

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