1.1 The Purpose And Nature Of Business

Question 1

What is a good?

What is a service?

What is a need?

What is want?

Answer 1

Good= a physical product

Service= intangible item

Need= a necessity that without it, you will be affected negatively

Wants= a thing that without, you will not come to any harm

Question 2

What is a customer?

What is a consumer?

What is a supplier?

What is a market?

Answer 2

CUSTOMER= the person who buys the product
CONSUMER= the person who uses the product
SUPPLIER= a business that sells products to another business
MARKET= where buyers and sellers meet to exchange goods and services

Question 3

What’s the definition of business?

Answer 3

An organisation that seeks to make profit.

Question 4

Why might people start a business?

3 reasons.

Answer 4

To be their own boss
To have flexible working hours
To pursue an interest
To earn more money
They’ve identified a gap in the market
They aren’t satisfied with their job
They want to provide a service to help others

Question 5

What is a raw material?

Answer 5

Raw material= wood,milk, petrol. Something that hasn’t been manufactured

Question 6

What is meant by a business opportunity?

Answer 6

A business opportunity means the sale of any product/ service that will enable the the purchaser to begin a business

For example the internet will/ could open a business opportunity

Question 7

State two threats to any new business

Answer 7

Competition with other companies
Change in economy
Legal changes
Technological change
Environmental expectation

Question 8

What is production?

Answer 8

The action of making or manufacturing from components or raw materials, or the process of being manufactured

Question 9

What is an entrepreneur?

Answer 9

Someone willing to take risks to achieve success

Question 10

What is an enterprise?

Answer 10

The skill involved in wanting to start and run a business

Question 11

What are characteristics of an entrepreneur?

Answer 11

Risk taker
Innovative
Independent
Persistent
Persistent
Self confident 
Organised
Good interpersonal skills
Ability to learn from failures

Question 12

What are the four factors of production?

Answer 12

Land

Labour

Capital

Enterprise

Question 13

What does land mean in relation to the four factors of production?

Answer 13

The physical land and the site on which the business is allocated and other natural resources a business may use

Factory, ingredients

Question 14

What does labour mean in relation to the factors of production?

Answer 14

The skills and numbers of employees employed by a business

Workers

Question 15

What does capital mean in relation to the factors of production?

Answer 15

Equipment used to provide the goods or services such as machinery/ equipment

Machinery

Question 16

What does enterprise mean in relation to the factors of production?

Answer 16

The skills of the people involved in the business to identify business opportunities and bring together resources to meet these opportunities

Inventors

Question 17

What is opportunity cost and what is an example?

Answer 17

Opportunity cost is something that you may have to give up to get something else.

For example, time, money, effort

Question 18

What are the 3 types of business and their function?

Info: when they all work together they become a chain of production

Answer 18

Primary= the physical/ raw material ( first stage of production)
Secondary= making that into a product, they use primary  resources and convert these into products
Tertiary= selling a service (provide a service)

Question 19

What are 4 basic business functions?

Answer 19

Sales and marketing, marketing and production, Human Resources, and finance accounting

Question 20

What are the 4 different types of change in the business environment?

What do they mean?

Answer 20

TECHNOLOGICAL CHANGE=changes the way we shop
ECONOMIC CHANGE=eg.interest rates,inflammation and GDP
LEGAL CHANGE= new laws etc
ENVIRONMENTAL CHANGE= customers want to know how a products made

Question 21

Keywords-

GOOD

Answer 21

A good is a physical item

Question 22

Keywords-

SERVICE

Answer 22

A service is a non-physical products

Question 23

Keywords-

CONSUMER

Answer 23

The person who ultimately uses the product

Question 24

Keyword-

CUSTOMER

Answer 24

Any person or organisation which buys or is supplied with a product by a business

Question 25

Keyword-

ENTREPRENEUR

Answer 25

Someone who takes on the risks of enterprise activity

Question 26

Keyword-

ENTREPRENEURSHIP

Answer 26

The activity of setting up a business or businesses taking on financial risks in the hope of profit

Question 27

Keyword-

ENTERPRISE

Answer 27

The process of identifying new business opportunities and taking advantage of them

Question 28

Keyword

A SOCIAL ENTERPRISE

Answer 28

A business that is set up to help society rather than make a profit

Question 29

Keywords-

RESOURCES

Answer 29

A stock or supply of money, materials, staff and other assets that can be drown on by a person in order to function effectively

Question 30

Keywords-

INTERESTS

Answer 30

Money paid regularly at a particular rate for the use of money lent or for delaying the repayment of debt

Question 31

Keywords-

INTEREST RATES

Answer 31

A value which shows the cost of borrowing money or the reward given for saving money

Question 32

Keywords

INFLATION

Answer 32

Sustained increase in the general price level of good and services in an economy over a period of time

Question 33

keywords

GDP

Answer 33

gross domestic production

-measure all income earned in a countries economy per year