A pottery studio employs Rafi to shape pots. Ava set up the studio using her own savings. She decides which pots to make and buys the clay, glazes and electricity used by the kiln. If sales fall, she could lose her savings.
The table shows information about the studio for one week.
| Item | Amount |
|---|---|
| Revenue from sales of pots | £1,200 |
| Hours worked by Rafi | 16 hours |
| Rafi's hourly pay | £14 |
| Cost of clay, glazes and electricity for the kiln | £356 |
Calculate the profit Ava makes from the studio in this week.
Explain why the payments received by Rafi and Ava are rewards for different factors of production.
81 exam-style questions on AQA GCSE Economics 1.1 Economic foundations, covering 1.1.1a Needs and wants, 1.1.1b The central purpose of economic activity, 1.1.1c Key economic decisions, 1.1.1d The main economic groups, 1.1.2a The nature of an economic resource, 1.1.2b The four factors of production, 1.1.3a The basic economic problem and making choices, and 1.1.3b Opportunity cost. Each one has a worked solution and a mark scheme showing where the marks go.