Chapter 1 – Lecturers’ MCQs
1. Phillip makes wooden toy trains to sell at a local market. He uses wood blocks, glue and
paints to create the toy trains. This transformation process is known as
1
production
2
exchange
3
co-operation
.
4
operations
{Production is the transformation of certain resources into products and services. This may
be, for example, the conversion of flour, sugar and butter into bread, or the conversion of
bricks, sand, cement, wood and steel into a house.}
2. Which one of the following statements is NOT true regarding society’s scarce resources?
1
The supply of natural resources a country possesses cannot be increased.
2
Human resources include the physical and mental talents and skills of people
employed to create products and services.
3
Capital products have a short working life and stocks can be built up quickly.
4
Entrepreneurship refers to the collective capacity of those individuals who accept
the risks involved in providing products and services.
{Capital products usually have a long working life – for example, office buildings,
factories, machinery and other equipment may be used over and over again in the
production process.}
3.
Sipho owns a small tuck shop in Diepsloot. The business is not registered and, therefore,
Sipho does not pay any rates or taxes to the South African Revenue Services. Sipho’s
tuck shop forms part of the
1
informal
2
formal
3
unreserved
sector.
4
reserved
{Many microenterprises form part of the so-called informal sector. They are not part of the
formal economy because they are not registered and many people involved in these
enterprises live primarily on a subsistence or survival basis. Moreover, such businesses
often put pressure on the infrastructure of inner-city areas, as due to their informal nature
they do not contribute to rates and taxes.}
4. Which one of the following is a characteristic of a market economy?
1
Members of a community may not possess assets or earn a profit.
2
There is little or no freedom of choice for producers and consumers.
3
There is no competition in the market.
4
The state keeps its interference in the system to a minimum.
5. Jonathan started at his new job more than a month ago. He feels, however, that his
colleagues do not respect him and that he is not accepted and valued by the company.
This refers to Jonathan’s
needs that are not satisfied according to Maslow’s
hierarchy of needs.
1
self-realisation
2
security
3
esteem
4
social
{Esteem needs include the need for a positive self-image and selfrespect, and the need for
recognition from others. In organisations, this need can be satisfied by means of
compliments to employees, access to information, job titles and challenging job
assignments.}
6. The variety of needs that a country has determines the
environment.
1
complexity
2
flexibility
3
nature
4
composition
of its business
7.
Which of the following organisations are regarded as non-profit seeking organisations?
a.
Amateur sports clubs
b.
Cultural associations
c.
Business Unity South Africa
d.
Welfare organisations
1
a, b, d
2
a, c
3
b, d
4
a, b, c, d
8. Fischer price, a producer of children's toys, has to comply with local and international
standards to protect consumers from unsafe products. This is known as
1
business ethics
2
consumerism
3
sustainability
4
social responsibility
.
{Consumerism is a social force that protects consumers against unsafe products and
malpractice by exerting moral and economic pressure on businesses}
9. Resources are the basic inputs in the production of products and services. These
resources are also known as production factors. Sibusiso owns a shoe factory and shop
in Gugulethu. Which one of the following would describe capital as a production factor?
1
The risk Sibusiso is taking in starting a shoe shop in Gugulethu.
2
The sales experience and skills Lindiwe (Sibusiso’s sales person) has.
3
The computer and sales programme Sibusiso purchased in order to make the
recording of sales easier.
4
The leather Sibusiso sources in order to make his exclusive shoes.
{Capital products usually have a long working life – for example, office buildings, factories,
machinery and other equipment may be used over and over again in the production
process.}
10. Thandi owns a shop by the name of Bride-to-Be. Thandi designs and makes wedding
gowns. The business management task for Bride-to-Be is to
1
.
market Bride-to-Be as one of the best wedding gown suppliers in the area
2
produce the highest possible number of wedding gowns at the least amount of
input
3
establish a proper layout of production for the seamstresses making the wedding
dresses
4
build a good relationship with fabric suppliers and customers alike
{The purpose of business management is to produce the greatest number of units of
products or services at the lowest possible cost. From this emerges the task of business
management, which is to determine how an organisation can achieve the highest possible
output (products and services), with the least possible input (human resources, natural
resources and capital)}