3.1.1

Question 1

Reasons for setting up a business

Answer 1

-ideas for a new product/ service
-ideas to improve an existing product service
-spotting a gap in the market

Question 2

Factors of production

Answer 2

land- natural resources available for production
labour- human input into the production process
enterprise- organise factors of production and take risks
capital- goods used in the supply of products

Question 3

Types of business

Answer 3

primary sector- extracts natural resources
secondary sector- manufactures goods
tertiary sector- provides services

Question 4

Key business operations

Answer 4

HR- responsible for managing the people in a business
Operations- organises the process that turns inputs into goods or services
Finance- manages financial resources
Marketing- responsible for understanding the needs and wants of customers

Question 5

Characteristics of an entrepreneur

Answer 5

-innovative
-risk takers
-hard working

Question 6

opportunity cost

Answer 6

the loss of alternatives when other alternatives are chosen