IGCSE Business Studies Exam |
Questions And Answers | Latest Exam
2026-2027 | 100% Guaranteed Pass
Needs -ANSWER We cannot live without these.
Wants -ANSWER They benefit us but are not necessary to live.
Scarcity -ANSWER Lack of sufficient resources.
Needs (example) -ANSWER Water, food, housing.
Wants (example) -ANSWER Soft drinks, chocolate, furniture.
Opportunity Cost -ANSWER The next best alternative.
Factors of Production -ANSWER Resources needed to produce goods and services.
Factors of Production (List) -ANSWER Land.
Labour.
Capital.
Enterprise.
Land -ANSWER All natural resources.
Land Resources (examples) -ANSWER Coal, oil, gas.
Labour -ANSWER Man-power used in a copmany
Capital -ANSWER Finance and machinery
Entrepreneur -ANSWER Someone who organises, operates and takes risks in a new
business venture.
Enterprise -ANSWER Skill/risk-taking ability of entrepreneurs.
Added Value
+How to add value
+Justify adding value -ANSWER The difference between selling price and cost of
materials.
Increase selling price, decrease cost of materials
The product must be desirable and important to customers
, Sectors of Production
+What are the sectors (definitions and examples) -ANSWER The three stages a product
passes through before reaching the consumer.
Primary: Extracts/sells raw materials /Woodcutter
Secondary sector: Manufactures goods using raw materials/Furniture maker
Tertiary Sector: Sells products/ services to customers/DFS
Chain of Production -ANSWER The sequence of a product passing through the three
sectors of production
Specialisation
+Example -ANSWER When a business concentrates on a particular industry or part of
that industry.
Vauxhall makes only cars
Division of Labour -ANSWER When production is split into different tasks performed by
different people.
In a car plant, different people fitting the headlights, seats, etc.
Difference between Specialisation and Division of Labour -ANSWER Specialization is
usually on a company-wide level.
Division of labour deals with specific tasks.
Mixed Economy -ANSWER Has both a private and public sector.
Public Sector
+Example -ANSWER Businesses owned by the government, to provide the people of a
country.
Police service, free healthcare
Private Sector
+Example -ANSWER Businesses owned by private individuals for profit
Supermarket
Privatisation -ANSWER Governments selling parts of of whole businesses to private
sector firms
Nationalisation -ANSWER Governments taking control of private sector businesses
Entrepreneur (benefits) -ANSWER Independence, put ideas into practice, higher income.
Entrepreneur (disadvantages) -ANSWER Risk, loss of capital, lack of knowledge,
opportunity cost.
Characteristics of Successful Entrepreneurs -ANSWER Creative, optimistic, independent,
innovative.
Questions And Answers | Latest Exam
2026-2027 | 100% Guaranteed Pass
Needs -ANSWER We cannot live without these.
Wants -ANSWER They benefit us but are not necessary to live.
Scarcity -ANSWER Lack of sufficient resources.
Needs (example) -ANSWER Water, food, housing.
Wants (example) -ANSWER Soft drinks, chocolate, furniture.
Opportunity Cost -ANSWER The next best alternative.
Factors of Production -ANSWER Resources needed to produce goods and services.
Factors of Production (List) -ANSWER Land.
Labour.
Capital.
Enterprise.
Land -ANSWER All natural resources.
Land Resources (examples) -ANSWER Coal, oil, gas.
Labour -ANSWER Man-power used in a copmany
Capital -ANSWER Finance and machinery
Entrepreneur -ANSWER Someone who organises, operates and takes risks in a new
business venture.
Enterprise -ANSWER Skill/risk-taking ability of entrepreneurs.
Added Value
+How to add value
+Justify adding value -ANSWER The difference between selling price and cost of
materials.
Increase selling price, decrease cost of materials
The product must be desirable and important to customers
, Sectors of Production
+What are the sectors (definitions and examples) -ANSWER The three stages a product
passes through before reaching the consumer.
Primary: Extracts/sells raw materials /Woodcutter
Secondary sector: Manufactures goods using raw materials/Furniture maker
Tertiary Sector: Sells products/ services to customers/DFS
Chain of Production -ANSWER The sequence of a product passing through the three
sectors of production
Specialisation
+Example -ANSWER When a business concentrates on a particular industry or part of
that industry.
Vauxhall makes only cars
Division of Labour -ANSWER When production is split into different tasks performed by
different people.
In a car plant, different people fitting the headlights, seats, etc.
Difference between Specialisation and Division of Labour -ANSWER Specialization is
usually on a company-wide level.
Division of labour deals with specific tasks.
Mixed Economy -ANSWER Has both a private and public sector.
Public Sector
+Example -ANSWER Businesses owned by the government, to provide the people of a
country.
Police service, free healthcare
Private Sector
+Example -ANSWER Businesses owned by private individuals for profit
Supermarket
Privatisation -ANSWER Governments selling parts of of whole businesses to private
sector firms
Nationalisation -ANSWER Governments taking control of private sector businesses
Entrepreneur (benefits) -ANSWER Independence, put ideas into practice, higher income.
Entrepreneur (disadvantages) -ANSWER Risk, loss of capital, lack of knowledge,
opportunity cost.
Characteristics of Successful Entrepreneurs -ANSWER Creative, optimistic, independent,
innovative.
