business in the real world - purpose and nature of businesses Flashcards
What is a business?
An organisations which provides a good or service.
What are the two types of products?
Goods and services.
What is a good?
Physical items a business sells.
What is a service?
Actions performed by a business to aid the customer.
What are needs?
Things which the customer cannot live without.
What are wants?
Things the customer would like to have, but can survive without.
Give 2 reasons why a business would be set up.
- Produce goods
- Supply a service
- Distribute products
- Fulfil a business oppurtunity
- Provide a good or service to help others
What are the four factors of production?
Capital, Enterprise, Land, Labour.
As a factor of production, what is capital?
The equipment, factories and schools that help produce goods and services.
As a factor of production, what is enterprise?
The risk undertaken by an entrepreneur in transforming the other factors of production into output in order to gain a reward, usually profit.
As a factor of production, what is land?
Natural resources such as agriculture, fishing, forestry, oils.
As a factor of production, what is labour?
The work done by the people who contribute to the production process.
What is oppurtunity cost?
The benefit that is given up in order to do something else.
What is the primary sector?
Businesses which produce raw materials used to make goods and services.
Give an example of a business in the primary sector.
- Farming industry
- Fishing industry
- Mining industry
What is the secondary sector?
Businesses which are involved with the manufacture of goodds and turn raw materials into finished goods.
Give an example of a business in the secondary sector.
- Chocolate factory
* Tinned goods factory
What is the tertiary secotr?
Businesses which provide services.
Give an example of a business in the tertiary sector.
- Cafe
- Supermarket
- Hairdressers
- Bank
What is meant by the term enterprise?
The formation of a new business or development of a new good or service to be introduced into the market.
What is an entrepreneur?
Someone who is willing to take on the risks of enterprise acitvity.
Give 2 characteristics of an entrepreneur.
- Hard-working
- Innovative
- Organised
- Willing to take risk
Give 2 objectives of an entrepreneur.
- Be their own boss
- Flexible working hours
- Pursue an interest
- Earn more money
- Fill a gap in the market
- Current job dissatisfaction
When making decisions, what 4 things in dynamic nature do businesses have to consider?
Technology, economic situation, legislation and environmental expectations.
