business enterprise

Question 1

what is a business

Answer 1

an organization that uses resources to meet the needs of customers by providing a product or servie

Question 2

creating value

Answer 2

increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for

Question 3

added value

Answer 3

the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for.

Question 4

factors of production

Answer 4

capital, land, labor and enterprise

Question 5

social enterprise

Answer 5

a business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners.

Question 6

why businesses fail

Answer 6

lack of record keeping
lack of cash and working capital
building a customer base
poor management
changes in the business environment

Question 7

entrepreneur

Answer 7

someone who takes the financial risk of starting and managing a business

Question 8

skills of a good entrepreneur

Answer 8

innovation, commitment, risk taker, multiskilled, leadership skills, confidence (ability to bounce back)

Question 9

business needs

Answer 9

capital, land, labor, enterprise, suppliers, customers, government

Question 10

opportunity cost

Answer 10

the benefit of the next most desired option which is given up.

Question 11

social, environmental and economic objectives

Answer 11

economic– make a profit to reinvest back into the business and provide some return to owners

social– provide jobs or support for local, often disadvantaged, communities

environmental– to protect the environment and to manage the business in an environmentally sustainable way.

These aims are often referred to as the triple bottom line. This means that profit is not the sole objective of these enterprises.

Question 12

triple bottom line

Answer 12

the three objectives of social enterprises: economic, social and environmental.

Question 13

benefits of enterprise on a country’s economy

Answer 13

employment creation
economic growth (higher standards of living)
increased exports
increased social cohesion
personal development
innovation and technological advancement

Question 14

common challenges entrepreneurs face

Answer 14

1. cash flow management
2. hiring the right people
3. time management focus

Question 15

Examples of Opportunity Cost in the Business & Economic Environment

Answer 15

work-leisure choices

The opportunity cost of deciding not to work an extra ten hours a week is the lost wages given up.

Government spending priorities

The opportunity cost of the government spending an extra £10 billion on investment in National Health Service might be that £10 billion less is available for spending on education or defence equipment.

Investing today for consumption tomorrow

The opportunity cost of a business investing resources in new capital goods is the production of consumer goods given up for today.