Jonah is employed as a joiner by a firm whose main business activity is building houses. The firm also employs bricklayers, plumbers, painters, and other skilled tradesmen. Other factors of production are used when building houses. The owner of the firm, Jack, believes that specialization of labour brings many benefits to the business and its workers.
In his spare time, Jonah makes wooden toys that his sister sells on her stall at the local market. He buys the wood and other resources from a local supplier. The wooden toys have been so successful that Jonah has decided to leave his job as a joiner to set up his own toy-making business.
a. Identify two stages of business activity.
b. What is meant by ‘factors of production’?
c. Using the information in the case study, explain the meaning of ‘opportunity cost’.
d. Identify and explain two ways Jonah could add value to his toys.
e. Do you agree with Jack that ‘specialisation of labour brings many benefits to the business and its workers’? Justify your answer.