1.1 The Purpose And Nature Of Business

Question 1

Need

Answer 1

Products you need in order to survive

Question 2

Want

Answer 2

Products you want to have but don’t need

Question 3

What is a business

Answer 3

An organisation which trades to make money

Question 4

Products / goods

Answer 4

Physical items (tangible - can be touched)

Question 5

Services

Answer 5

A service is an act that a business person carries out for you in exchange for money

Question 6

Land

Answer 6

Buildings / offices

Question 7

Labour

Answer 7

Work of staff

Question 8

Capital

Answer 8

Money / machinery

Question 9

Enerprise

Answer 9

Ideas and risk-taking

Question 10

What are the factors of production?

Answer 10

Land, Labour, Capital, Enterprise

Question 11

What are the sectors of industry

Answer 11

Primary, Secondary, Tertiary

Question 12

Primary sector

Answer 12

Extracting raw materials

Question 13

Secondary sector

Answer 13

Manufacturing

Question 14

Tertiary sector

Answer 14

Providing a service

Question 15

Opportunity cost

Answer 15

The value of the next best alternative, lost when we make a choice. For example; if our choices could generate a)£10,
b)£100, or c)£1000. The opportunity cost of choosing option c is the value of b = £100

Question 16

Enterprise & Entrepreneurship

Answer 16

Enterprise is the act of doing business - investing and working in order to increase the value of raw materials or our actions.

Entrepreneurship is the act of creating new business ideas, taking opportunities, while being innovative and prepared to take risks in order to turn their money into more money.