Cambridge IGCSE Business Studies c Division of labour is where each member of RTP’s workforce will specialise in one area of the production process. They will become very skilled at doing the same task and this could increase RTP’s labour productivity. However, the workers may become bored if they are only doing simple repetitive tasks and this might cause problems for RTP. (Although not expected at this stage in the course, more able students may identify some of these problems, e.g. lower productivity, poor quality, increased absenteeism and an increase in labour turnover.) Student’s answer must include suitable justification.
Activity 1.4 (page 17) Student’s own answer.
Activity 1.5 (page 17)
•• By taking raw materials, e.g. ingredients and food items, and converting these into meals for diners. •• •• ••
Owners may also decorate and furnish restaurant so that it is nicer place for diners to eat. Taking leather and converting this into shoes for people to wear. By converting materials such as wood, cement, bricks into houses that people can live in. By taking flowers and combining these into bouquets or other displays for customers to buy.
Case study (page 18) a Enterprise, e.g. Mitike Paulos and her younger sister; Land, e.g. workshop; Capital, e.g. equipment; Labour, e.g. ten workers. b Process of producing goods and services to satisfy consumer demand. Mitike’s business produces leather bags and belts that are sold to customers. c Business employs workers who are paid a wage. They can use money from wages to buy basic needs, e.g. water, food, clothing and housing. d Mitike’s business takes raw material – leather – and converts this into bags and belts that it sells to customers at a higher price than what the business pays for the leather. e Add special features to products that will make them different or better than similar products offered by competitors; create a brand image for products through advertising or persuading local celebrity to buy products – celebrity endorsement.
Test yourself (page 18) 1 A ‘need’ is something that is essential to living, e.g. food, water, clothing, shelter. A ‘want’ is something that people would like but is not essential for living, e.g. mobile phone, holiday. 2 Impossible to produce enough goods and services to meet consumers’ needs and wants. 3 Unlimited wants cannot be satisfied because there are limited factors of production. This creates scarcity. 4 Specialised machinery may help a business to increase productivity, lower costs of production and produce a wider range of products.
Exam practice questions (page 19) 1 a Jonah has identified that consumers want to buy wooden toys; Jonah buys raw material and other resources needed to produce wooden toys; Jonah converts raw materials into finished products which satisfies consumer wants. [2] b Toys are hand-made. Jonah does not use machinery to make toys. [2] c Cost of next best alternative given up (2). Instead of making and selling wooden toys, Jonah could earn wage by working as joiner for local house builder (2). [Total: 4] d Answers might refer to branding, special features, personalised service and convenience, as shown below (1 per relevant point identified up to a maximum of 2). Jonah could add special features or © Cambridge University Press 2014 Cambridge IGCSE Business Studies
Section 1 Answers to Coursebook activities
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