Definitions

Question 1

What is entrepreneurship?

Answer 1

Entrepreneurship is the actions and decisions taken by a person in operating a business and and that person’s efforts in combining the other factors of production in order to make a profit. In doing all of this they take financial risk.

Question 2

What does the factors of production mean?

Answer 2

The resources that are used in the production of goods and services.

Question 3

What are goods?

Answer 3

Goods are tangible items which satisfy some human need or want.

Question 4

What is a service?

Answer 4

A service is an economic activity which is consumed in order to satisfy a need or want.

Question 5

What are resources?

Answer 5

Resources are the things that are useful in the production of a good or service.

Question 6

What is capital in economics?

Answer 6

the tools and machinery used to produce goods and services

Question 7

What is land?

Answer 7

Land is any natural resource used in the production of goods and services.

Question 8

What is labour

Answer 8

Labour is the work and effort that labourers and workers perform at all levels of a business organisation EXCEPT FOR THE ENTREPRENEUR in order to contribute towards the production of a good or service.

Question 9

What is the difference between a customer and a consumer?

Answer 9

Consumers are people who USE goods and services. Customers are people who BUY goods and services.

Question 10

What is added value?

Answer 10

The difference between the selling price and the cost of the resources used.

Question 11

Revenue

Answer 11

The total amount earned

Question 12

Profit

Answer 12

The revenue - the expenses

Question 13

What is the industrial sector?

Answer 13

Another name for the secondary sector.

Question 14

What is the primary sector?

Answer 14

This sector involves acquiring raw materials and the processing and packaging of them. For example, metals and coal have to be mined, oil drilled from the ground, rubber tapped from trees, foodstuffs farmed and fish trawled. This is sometimes known as extractive production.

Question 15

What is the secondary sector?

Answer 15

This sector invlovles the manufacturing and assembly process. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.

Question 16

What is the tertiary sector?

Answer 16

Comprised of firms which provide services.

Question 17

What is the chain of production?

Answer 17

There are three main types of industry in which firms operate. These sectors form a chain of production which provides customers with finished goods or services.

Question 18

What is enterprise?

Answer 18

Enterprise is the skills and actions of someone who shows initiative by taking a financial risk by setting up, investing in and running a business. Someone who shows enterprise is an entrepreneur.

Question 19

What is the public sector?

Answer 19

The public sector is all the organisations owned and controlled by the government.

Question 20

What is the private sector?

Answer 20

The private sector is all the businesses and organisations owned and controlled by individuals.