Sample Quizzes For Preparation: Business Activity
Q1.
Which of the following best defines a need?
A) A product that brings enjoyment
B) A luxury item used for status
C) Something essential for survival
D) An unnecessary expense
Q2.
Which of the following is a want rather than a need?
A) Clean drinking water
B) Insulin for diabetics
C) A branded smartwatch
D) A basic shelter
Q3.
What is scarcity?
A) When there is no money in the economy
B) When wants exceed available resources
C) When prices are unusually high
D) When businesses cannot make profit
Q4.
Which of the following best describes opportunity cost?
A) The profit made after selling a product
B) The cost of producing one extra unit
C) The next best alternative foregone
D) The cost of raw materials
Q5.
Which of these is an example of opportunity cost?
A) Choosing between brands at the same price
B) Losing time in a traffic jam
C) Building a hospital instead of a stadium
D) Saving money for future expenses
Q6.
What is the main purpose of business activity?
A) To produce goods only for luxury markets
B) To increase government revenue
C) To satisfy needs and wants using resources
D) To reduce the number of products in a market
Q7.
Which of the following is not an input in business production?
A) Land
B) Labour
C) Capital
D) Marketing
Q8.
Which of the following is an example of capital in business?
A) A customer buying the product
B) A loan from the bank
C) A truck used for deliveries
D) A retail employee
Q9.
What does enterprise refer to in a business?
A) The amount of money borrowed
B) The entrepreneur’s role in organising production and taking risks
C) The number of employees hired
D) The level of customer satisfaction
Q10.
Which of the following best describes specialisation?
A) A business producing every product possible
B) Focusing on one product or task to increase efficiency
C) Importing goods from different countries
D) Reducing production to cut costs
Q11.
Which of these is an advantage of specialisation?
A) Reduced worker productivity
B) Decreased product quality
C) Lower average costs
D) Higher risk of product failure
Q12.
What is a disadvantage of specialisation?
A) Higher motivation
B) Easier diversification
C) Boredom from repetitive tasks
D) Increased product range
Q13.
Which of these is a national example of specialisation?
A) A worker only doing one task on a production line
B) A country focusing on oil production
C) A firm buying raw materials locally
D) A school hiring more teachers
Q14.
Which statement is true about wants?
A) They are limited and never change
B) They are more important than needs
C) They are unlimited and vary over time
D) They are essential for survival
Q15.
How is added value calculated?
A) Input cost minus output value
B) Output value minus input cost
C) Profit divided by sales
D) Total revenue minus total cost
Q16.
Why is adding value important for businesses?
A) It reduces employee salaries
B) It increases the quantity of raw materials
C) It allows higher pricing and creates profit
D) It ensures government subsidies
Q17.
Which of these is not a method of adding value?
A) Improving customer service
B) Cutting staff wages
C) Enhancing product quality
D) Attractive packaging
Q18.
Which of the following would most likely increase the added value of a product?
A) Reducing product variety
B) Lowering selling price
C) Using recycled materials with a strong eco-brand
D) Hiring fewer workers
Q19.
Which of the following correctly matches an input with its example?
A) Labour – solar energy
B) Land – a designer logo
C) Capital – factory machinery
D) Enterprise – metal raw material
Q20.
Which of the following is true about needs?
A) They include fast food and concerts
B) They are required for social media use
C) They are essential for survival
D) They can be ignored during inflation
Q21.
Which of the following is an example of enterprise in action?
A) A factory worker performing a set task
B) A loan officer approving a business loan
C) A manager combining resources to produce goods
D) A shop assistant arranging shelves
Q22.
In economic terms, what causes the need to make choices?
A) Limited education
B) Unlimited government funding
C) Scarcity of resources
D) Political instability
Q23.
Which of the following could be a result of over-specialisation?
A) Increased flexibility in workforce
B) Better job rotation
C) Higher employee motivation
D) Reduced adaptability during market changes
Q24.
What is the most likely consequence of not adding value?
A) Business growth
B) Higher profits
C) Lower customer satisfaction
D) Unique brand image
Q25.
Which of the following increases value without raising cost?
A) Cutting packaging size
B) Improving product design
C) Lowering quality standards
D) Ignoring customer feedback
Q26.
Which input includes natural resources?
A) Capital
B) Labour
C) Enterprise
D) Land
Q27.
Which of the following products has the most added value?
A) Raw cotton sold in kilos
B) Branded cotton shirt sold in a store
C) Cotton bales at a warehouse
D) Cotton waste used for cleaning
Q28.
If a product costs Rs. 300 to produce and sells for Rs. 800, what is the added value?
A) Rs. 300
B) Rs. 500
C) Rs. 1100
D) Rs. 800
Q29.
Which of these actions would likely decrease added value?
A) Using higher quality ingredients
B) Providing better warranties
C) Offering free home delivery
D) Reducing product durability
Q30.
What makes specialisation effective in a large-scale business?
A) More advertising
B) Employees switching roles frequently
C) Each worker focusing on a specific task
D) Having no clear job roles
Answers and Explanations
Q1 – C
A need is something essential for survival. The other options are wants or luxuries.
Q2 – C
A smartwatch is a want — not essential. The others are basic needs.
Q3 – B
Scarcity occurs when resources are limited but wants are unlimited.
Q4 – C
Opportunity cost is the next best alternative foregone when a choice is made.
Q5 – C
Building a hospital instead of a stadium reflects opportunity cost — the stadium is what’s sacrificed.
Q6 – C
Business activity aims to satisfy needs and wants by producing goods/services from limited resources.
Q7 – D
Marketing is not a direct input; it’s part of promotion. Inputs are land, labour, capital, enterprise.
Q8 – C
A delivery truck is a capital asset. Loans are finance, not capital goods.
Q9 – B
Enterprise refers to the role of the entrepreneur who organises the other factors and takes risks.
Q10 – B
Specialisation increases efficiency by focusing on one task or product.
Q11 – C
Specialisation helps lower average costs through efficiency and economies of scale.
Q12 – C
Boredom can result from repetitive tasks in specialisation.
Q13 – B
Countries often specialise in industries where they have an advantage (e.g., oil, tourism, IT).
Q14 – C
Wants are unlimited and change over time. Needs are limited and constant.
Q15 – B
Added value = selling price – cost of inputs (output value – input cost).
Q16 – C
Adding value enables businesses to set higher prices and earn profits.
Q17 – B
Cutting wages doesn’t add value; it may lower morale. All other options can improve customer perception.
Q18 – C
Branding using recycled materials boosts value perception with minimal cost increase.
Q19 – C
Capital refers to tools/machines. Factory machinery is a capital item.
Q20 – C
Needs are essential for human survival, such as food, water, and shelter.
Q21 – C
Enterprise involves combining the other factors — a manager/entrepreneur does this.
Q22 – C
Scarcity means we must make choices due to limited resources.
Q23 – D
Over-specialisation makes workers or businesses vulnerable to market shifts.
Q24 – C
If no added value is created, customers are less satisfied and may switch brands.
Q25 – B
Better design can improve perceived value without increasing cost.
Q26 – D
Land includes all natural resources like minerals, forests, and farmland.
Q27 – B
Finished, branded products have the most added value. Raw materials have the least.
Q28 – B
Added value = Rs. 800 – Rs. 300 = Rs. 500.
Q29 – D
Reducing durability lowers product quality and perceived value.
Q30 – C
Specialisation works best when each worker focuses on one clearly defined role.