Allocation of Resources - Grade 7

1. What is meant by the term “resources” in business?

• Only money used in business

• Items used to make goods and services

• Goods sold to customers

• Materials kept in storage

Which of the following is a natural resource?

• Machinery

• Water

• Labour

• Money

Why do businesses need to allocate resources?

• To increase prices

• To reduce staff

• To use them efficiently

• To avoid selling products

What is the role of an entrepreneur in resource allocation?

• Buying only land

• Deciding how to use resources wisely

• Providing free labour

• Creating money

What is opportunity cost?

• The cost of all the options available

• The cost of what is lost when a choice is made

• The money spent on materials

• The profit made in a business

Which of the following best describes resource scarcity?

• Having too many resources

• Unlimited supply of goods

• Limited resources but unlimited wants

• Wasting all the available materials

What should a business do if a resource is scarce?

• Use more of it

• Stop working

• Allocate it to the most important use

• Store it for later

If a business has limited workers, what should it consider?

• Give them more holidays

• Assign them to the most important tasks

• Fire half of them

• Replace all of them with robots

A country has to decide whether to spend money on schools or hospitals. This is an example of:

• Market planning

• Resource mismanagement

• Opportunity cost

• Capital investment

The most basic problem in economics is:

• High profits

• Unlimited resources

• Limited wants

• Scarcity of resources