1.1 - Enterprise and entrepreneurship

Question 1

1.1.1 - What is the difference between a good and a serivice?

Answer 1

A good is a physical tanglible product (you can touch it)

A service is an experince that is intagible (can’t touch it)

Question 2

1.1.1 - What is the difference between a consumer and a customer?

Answer 2

A customer purchases the product and the consumer uses the product

Question 3

1.1.1 - For what three reasons do new business ideas come about?

Answer 3

• Changes in technology
• Changes in consumer needs
• A product becoming obsolete

Question 4

1.1.1 - What does it mean if a product is obsolete?

Answer 4

It is outdated and no longer in use

Question 5

1.1.1 - What is an entrepreneur?

Answer 5

Someone who creates a business, taking on
financial risks with the aim of making a profit from the
business.

Question 6

1.1.1 - In what two ways do new business ideas come about?

Answer 6

• Original ideas

- Adapting existing concepts

Question 7

1.1.2 - What are three risks that start-ups face?

Answer 7

• Business failure
• Lack of (financial) security
• Finacial loss

Question 8

1.1.2 - What is the difference between variable and fixed cost?

Answer 8

• Variable costs are costs that depend on the amount of products you manufacture (e.g. Raw materials, wages, transport)
• Fixed costs (overheads) are costs that remain no matter your production rate (e.g. Rent, insurance, salary)

Question 9

1.1.2 - How do you work out variable cost?

Answer 9

Cost per unit x sales volume

Question 10

1.1.2 - What are five financial rewards for a start-up?

Answer 10

• Survival
• Profit
• Wealth
• Income
• Financial Security

Question 11

1.1.2 - What are three non-financial rewards for a start-up?

Answer 11

• Personal Satisfaction
• Independence
• Control

Question 12

1.1.3 - What is a stakeholder?

Answer 12

Any person with interest in the business

Question 13

1.1.3 - What are the three purposes of business enterprise?

Answer 13

• To meet customer needs
• To add value
• To provide goods and services

Question 14

1.1.3 - How may a business add value?

Answer 14

• Convenience
• Quality
• Branding
• Design
• USP

Question 15

1.1.3 - What are the roles of an entrepreneur?

Answer 15

• Organise resources
• Make business desicions
• Take risks