Chapter 1: role of business

Question 1

define a finished product

Answer 1

a finished product is one that is ready for consumers to buy and use

Question 2

define production

Answer 2

production refers to the activities undertaken by a business that combine resources to create products to satisfy customer’s wants and needs

Question 3

what are the functions of a business

Answer 3

profit, employment, choice, innovation, income, entrepreneurship and risk, wealth and quality of life

Question 4

outline profit as a function of a business

Answer 4

the return and reward that business owners receive for producing products that consumers want/need

revenue - operating costs

Question 5

outline employment as a business function

Answer 5

businesses provide jobs for the local community
provide employees with income

Question 6

outline income as a function of a business

Answer 6

money received for providing labour to a business
can come in the form of salaries, wages or dividends

Question 7

outline choice as a function of a business

Answer 7

consumers gain the freedom of choice and the opportunity to purchase products at competitive prices
selecting amongst alternatives

Question 8

outline innovation as a function of a business

Answer 8

creating a new product, service or process, or significantly improving an existing one through R&D

Question 9

outline entrepreneurship and risk as a function of a business

Answer 9

the ability and willingness to start, operate and assume the risk of a business venture in hopes of earning profit

Question 10

outline wealth as a function of a business

Answer 10

business activity results in higher levels of eco growth and wealth

Question 11

outline quality of life as a function of a business

Answer 11

overall wellbeing of an individual and is a combination of both material and non-material benefits