Principles Of Business: Production Quiz

Explanation
Production involves the creation of goods and services to satisfy the needs and wants of the consumer. The consumer is the individual or entity that ultimately uses or consumes the goods and services produced. The producer is responsible for creating these goods and services, but their main goal is to cater to the demands and preferences of the consumer. The seller and exporter are involved in the distribution and sale of the goods and services, but their roles are secondary to the consumer's needs and wants.

Explanation
Land is the correct answer because it refers to all natural resources such as forests, minerals, water, and land itself. These resources are used in the production of goods and services. Land is an essential factor of production as it provides the raw materials necessary for various industries and economic activities. It is a finite resource and its availability and quality can significantly impact the productivity and profitability of businesses.

Explanation
The correct answer is "surplus." Surplus refers to the production of goods and services that exceed the demand in both the local and overseas markets. This means that there is an excess supply of goods and services available, which can be beneficial for the economy as it can be exported or stored for future use.

Explanation
The correct answer is "subsistence." Subsistence refers to producing enough to satisfy basic needs. In this context, it means that production at this level is aimed at meeting the essential requirements for survival and sustenance. It implies that the focus is on producing enough to meet immediate needs rather than generating a surplus or engaging in export or manufacturing activities.

Explanation
Production at the secondary level, which refers to the manufacturing or processing of raw materials into finished goods, relies on the extractive industry for its raw materials. The extractive industry involves the extraction of natural resources such as minerals, oil, gas, or timber from the earth or sea. These raw materials are then used as inputs in the manufacturing process to produce goods. Therefore, the extractive industry plays a crucial role in supplying the necessary raw materials for secondary level production.

Explanation
Manufacturing is operating at the secondary stage of production because it involves the transformation of raw materials into finished goods through various processes such as cutting, shaping, assembling, and packaging. This stage follows the primary stage, which includes activities like mining, fishing, and agriculture that extract or produce raw materials. Manufacturing adds value to these raw materials by converting them into usable products for consumers.

Explanation
Forestry operates at the primary stage of production as it involves the cultivation, management, and harvesting of trees for various purposes such as timber, paper, and other forest products. This industry is involved in the initial extraction of raw materials from nature and is considered a primary industry. Construction, transportation, and communication are secondary or tertiary industries as they involve processing, transportation, and communication of goods and services rather than the direct extraction of natural resources.

Explanation
Tourism is considered a service industry because it involves providing services to customers rather than producing tangible goods. In the tourism industry, businesses offer various services such as accommodation, transportation, entertainment, and guided tours to cater to the needs and wants of travelers. Unlike manufacturing, construction, and fishing, which involve the production of physical products, tourism focuses on delivering experiences and services to customers, making it a service industry.

Explanation
Building is not a primary industry because it involves the construction of structures and infrastructure using materials and resources that are already extracted or produced by primary industries such as mining, fishing, and farming. Building is considered a secondary industry as it adds value to the raw materials and products provided by primary industries.

Explanation
The payment returned to capital as a factor of production is interest. Interest refers to the amount of money paid by a borrower to a lender for the use of their capital. It is the compensation received by the owners of capital for lending their money or resources to others. This payment is separate from other factors of production such as wages for labor, rent for land, and profit for entrepreneurship.