Worksheet- 4

Topic-Chapter 1- Business activity

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Write the answers.

Section A: Multiple Choice Questions (MCQs)

1. Opportunity Cost
○ If a business decides to use its resources to produce Product A instead of
Product B, the opportunity cost is:
■ a. The profit earned from Product A.
■ b. The cost of resources used to produce Product A.
■ c. The potential profit that could have been earned from Product B.
■ d. The market value of Product A.
2. Added Value 2. Added value can be calculated as:
○ a. The difference between the selling price and the cost of raw materials.
○ b. The difference between the total revenue and the total cost.
○ c. The sum of the selling price and the cost of production.
○ d. The selling price minus the total expenses.
3. Qualities of an Entrepreneur 3. Which of the following is NOT considered a quality
of a successful entrepreneur?
○ a. Risk-taking ability
○ b. Innovation
○ c. Resistance to change
○ d. Persistence
4. Why Businesses Fail 4. A common reason why many new businesses fail within the
first few years is:
○ a. High customer demand
○ b. Poor management
○ c. High levels of investment
○ d. Efficient production processes
5. Business Plan 5. A business plan typically includes:
○ a. Market analysis
○ b. Employee personal profiles
○ c. Details of competitors' strategies
○ d. Personal financial history of the owner
Section B: Short Answer Questions

1. Opportunity Cost
○ Define opportunity cost and provide an example relevant to a business
 decision.
2. Added Value
○ Explain the concept of added value and how a business can increase its
added value.
3. Qualities of an Entrepreneur
○ List and describe three essential qualities of a successful entrepreneur.
4. Why Businesses Fail
○ Identify and explain three common reasons why businesses fail.
5. Business Plan
○ Outline the key components of a business plan.

Section C: Application and Analysis

1. Opportunity Cost
○ A small manufacturing company has the option to produce either 1,000 units
of Product X or 2,000 units of Product Y. The profit per unit for Product X is
$5, and for Product Y, it is $3. Calculate the opportunity cost of choosing to
produce Product X over Product Y.
2. Added Value
○ A bakery sells cakes for $20 each. The cost of ingredients and production per
cake is $12. Calculate the added value per cake and discuss two ways the
bakery could increase this added value.
3. Qualities of an Entrepreneur
○ Discuss how the qualities of an entrepreneur can impact the success of a new
tech startup.
4. Why Businesses Fail
○ Analyze the case of a small retail store that closed within two years due to poor
financial management. Discuss how better financial planning could have
prevented this failure.
5. Business Plan
○ Develop a brief business plan for a new online clothing store. Include an
executive summary, market analysis, marketing strategy, and financial
projections.