1b: Entrepreneurship

Question 1

what are the factors of production?

Answer 1

land: an area with both renewable and non-renewable natural resources

Labour: the work source of a business e.g. staff

capital: artificial resource made by labour e.g. tools , machinery

Question 2

what is opportunity cost ?

Answer 2

the benefit lost for the best next alternative

Question 3

what are two motives of an entrepreneur ?

Answer 3

financial motives : making a profit (profit maximisation)
and
non-profit motives

Question 4

what kind of non-profit motives are there ?

Answer 4

satisficing : to make enough profit to satisfy the entrepreneur (not always the most profit possible)

Ethical : starting business to help others .
e.g. produce stair lifts to help the elderly

social: profit making business that helps the local community. e.g. second hand book shop.

Independance :more freedom to fit work around family commitments.

Question 5

what are some characteristics of entrepreneurs ?

Answer 5

*self confidents
*commitment
*risk taking
*hard working

Question 6

few reasons why entrepreneurs are important to the economy

Answer 6

They meet local needs. e.g. plumber , hair dresser

They serve other businesses. e.g. cleaning of offices

better innovation. no need for approval from head office for decision making

Question 7

what some risks of becoming an entrepreneur ?

Answer 7

lower than expected sales : rivels put down there prices

unexpected costs: Raw material costs could rise e.g. ingredients

unexpected events : crisis in economy or bad weather