Booklet 1 - Business

Question 1

What is an entrepreneur?

Answer 1

An entrepreneur is someone who spots a business opportunity and carries it through.

The entrepreneur organises, manages and takes the risks of running the business.

Question 2

What are the characteristics of an entrepreneur?

Answer 2

-They are a risk-taker
-They can use their initiative
-They can make decisions
-They have innovative ideas
-They can organise things
-They are hard-working
-They never give up/ determined

Question 3

Why do people start businesses?

Answer 3

-To become their own boss
-Following a redundancy
-To earn and income/ make profit
-New idea for a product or service.
-To use their skills/ interests and personal qualities
-They spot a gap in the market

Question 4

What do businesses do?

Answer 4

1. Provide services
2. Produce goods
3. Distribute products

Question 5

Set up costs:

Answer 5

Those which need to be met before a business can start selling the new products. These include paying for market research, and buying premises, machinery, fixtures and fittings.

Question 6

Running costs:

Answer 6

• paying employees
  -buying stock
  -buying or leasing premises or equipment
  -giving credit to customers
  -buy services from other businesses
  -to pay interest loans

Question 7

Four factors of production (resources needed to produce goods or services\0

Answer 7

1.Land: The land itself and natural resource
2.Labour: People to make product
3.Capital: Money and machinery used
4.Enterprise: Name behind the product.

Question 8

Needs vs. Wants

Answer 8

Need - is a good or service essential for living
Examples: food, water, clothes, place to live

Want - good or service which people would like to have, but is not essential for living.
Examples: luxury house, cars, TVs

Question 9

Good vs service

Answer 9

Good - physical object that can be purchased
Example: laptop, chocolate, car

Service - non-physical item that can be purchased
Example: holiday, haircut

Question 10

Chain of production

Answer 10

Primary –> extracts and uses the natural resources of the Earth.

Secondary –> manufactures goods using the raw materials provided by the primary sector.

Tertiary –> provides services to consumers and the other sectors of industry.