'1.1.2 Risk and Reward'

Question 1

Purpose – to produce goods and services

Answer 1

*To produce goods and services 4 things are needed:
1. Land – somewhere to produce the goods e.g. a farm
2. Labour – people to work in the business e.g. farm workers
3. Capital – money to get the business started
4. Enterprise – This is the drive or motivation from the
owners to start a business

Question 2

Purpose – to meet customer needs

Answer 2

Some of the most common and basic expectations customers have for most businesses include:
A. Fast, efficient and accurate service
B. High quality products at a competitive price
C. Friendly, helpful service staff to provide information and answer questions
D. Prompt responses to their inquiries, whether online, by phone or in person
E. Sufficient stock to meet their needs without long waits
F. A trained staff that can handle their questions without referring them on
G. A clean shop or easy to navigate website

Question 3

Purpose – to add value

Answer 3

*Definition of added value:
*Added value – the difference between what a business pays its suppliers, and the price it is able to charge for its product or service