Business 9 Chapter 1 Test

Question 0

What does business mean?

Answer 0

Business is an organization that produces or sells goods or services to satisfy the needs, wants and demands of consumers for the purpose of making a profit.

Question 1

What’s an Entrepreneur?

Answer 1

A person who takes risks and starts a venture to solve a problem or to take advantage of an opportunity; a person who provides an innovative product or service to meet consumer’s wants or needs.

Question 2

What is the purpose of a business?

Answer 2

To make a profit

Question 3

How can a business be defined?

Answer 3

• The type of ownership
• The goods it produces or the services it offers
• The different functions that it performs in its community - charity for example
• The types of jobs it provides

Question 4

What’s a need?

Answer 4

An item that is necessary for survival, such as food, clothing or shelter

Question 5

What’s a want?

Answer 5

An item that is not necessary for survival, but it adds pleasure and comfort to life

Question 6

What does tangible mean?

Answer 6

Something you can see and touch (a good)

Question 7

What does intangible mean?

Answer 7

Not capable of being seen or touched (a service)

Question 8

What does “not for profit organization” mean?

Answer 8

A business that doesn’t seek to make a profit. (usually an organization)

Question 9

Define co-branding:

Answer 9

Having two or more businesses under one roof

Question 10

True or false: A person can be both a producer and a consumer of the same product

Answer 10

True

Question 11

What’s a consumer?

Answer 11

A person who buys goods and services

Question 12

What’s a producer?

Answer 12

An individual or business that makes a product. (Examples: computer manufacturer)

Question 13

Define the term “Capital Resource”

Answer 13

A resource such as equipment, a building, or money that is used to produce goods and services

Question 14

What does “Human Resource” mean?

Answer 14

“Labor.” People, who work to create the goods and services, (examples: farmers, nurses, and teachers).

Question 15

Define the term “Natural resources”

Answer 15

Raw materials that come from earth, water and air. (Examples: Iron, oil, trees, fish).

Question 16

What does Economic resource mean?

Answer 16

The means through which goods and services are made available to consumers; natural recourses and capital resources. (Also known as factors of production)

Question 17

Providing services requires ______ and _______.

Answer 17

skills and effort

Question 18

Goods are created by…?

Answer 18

Basic components

Question 19

What are three essential goods?

Answer 19

food, clothing, and shelter

Question 20

Name three essential services;

Answer 20

heating, lighting, and water

Question 21

Name three Luxury goods;

Answer 21

laptops, smartphones, gourmet food

Question 22

Name three luxury services;

Answer 22

spa, limousine ride, post-secondary education

Question 23

Define the term “Demand”

Answer 23

the quantity of a good or service that consumers are willing and able to buy at a particular price.

Question 24

Different needs and wants =

Answer 24

Different demands

Question 25

What is the Law of demand?

Answer 25

The economic principle that demand goes up when prices come down, and demand comes down when prices go up.

Question 26

What are four conditions that create demand?

Answer 26

1. The consumer must be aware of or interested in the good or service.
2. Having an ample supply of the good or service available for the consumer.
3. Establishing prices that are reasonable and competitive.
4. Accessibility; the good or service must be conveniently located for purchase (location, location, location)

Question 27

What are factors that affect demand?

Answer 27

• Change in the consumers’ income
• Increase in income; in most cases, people buy more of a product than before. Or the opposite may happen and a change in the type of product purchased may occur.
• Change in consumers’ taste (fashion, music)
• Expectations of future conditions
• Changes in population

Question 28

What is supply?

Answer 28

Supply is the quantity of a good or service that businesses are willing and able to provide within a range of prices that people would be willing to pay.

Question 29

What is the Law of Supply?

Answer 29

The economic principle that supply goes up when prices go up, and supply comes down when prices come down.

Question 30

Conditions that affect supply?

Answer 30

• Cost of production
• The price people are willing to pay
• A change in the number of producers
• The price of related goods
• Change in technology
• A change in expectations

Question 31

What is price determined by?

Answer 31

Price is determined by many factors, including both supply and demand

Question 32

True or False: Supply and demand are constantly changing

Answer 32

True

Question 33

What is price influenced by?

Answer 33

Price is influenced by the cost of producing good or service

Question 34

What do low prices do? What do high prices do?

Answer 34

Low prices tend to increase the consumer demand. High prices usually decrease demand

Question 35

What is the goal of business?

Answer 35

It is the goal of business to make profit and supply goods and services to meet consumers demands

Question 36

What is Profit?

Answer 36

The income that is left after all costs and expenses have been paid

Question 37

What are “Expenses?”

Answer 37

Those expenditures that are involved when running a business (wages, rent)

Question 38

What are “Costs?”

Answer 38

The amount of money required to reach for each stage of production

Question 39

Increase in costs and expenses =

Answer 39

Less profit

Question 40

What does making a profit do?

Answer 40

It allows a business to put more money back into the operation for expansion and growth

Question 41

Define “Solvent”

Answer 41

Having the ability to pay all debts and other obligations

Question 42

What does Competition mean?

Answer 42

A situation in which two or more business try to sell the same type of product or service to the same customer

Question 43

What does “Free Enterprise” mean?

Answer 43

An economic system in which economic resources are privately owned and decisions about what to produce are made freely by individual owners

Question 44

What are some keys to a businesses survival?

Answer 44

• A business cannot survive unless it produces goods or services that people need or want
• Over the years many products become obsolete (no longer in use)
• Successful businesses change as the needs and wants of consumers change

Question 45

Describe “Interdependence”

Answer 45

• Our society is interdependent: We rely on the goods and services provided by thousands od different businesses to satisfy our needs and wants
• Businesses are also interdependent
• Businesses need you and you need businesses

Question 46

True or False: Determining how much inventory a business must carry to satisfy the needs and wants of consumers is important.

Answer 46

True

Question 47

What does inventory mean?

Answer 47

goods and materials kept on hand

Question 48

What’s the decision making model?

Answer 48

1. Define the decision to be made
2. Identify the alternatives
3. Evaluate the advantages and disadvantages of each alternative
4. Make a decision and take action
5. Evaluate the decision