Enterprise 1.1

Question 1

Define the term “Consumer Goods”.

Answer 1

Consumer goods are the physical and tangible goods sold to the general public.

Question 2

Define the term “Consumer Services”.

Answer 2

Consumer services are the non-tangible products sold to the public.

Question 3

Define the term “Capital Goods”.

Answer 3

Capital goods are the physical goods used by the industry to aid in the production of other goods and services.

Question 4

Define the term “Creating Value”.

Answer 4

Creating value is increasing the difference between the cost of bought in materials and the price the finished goods are sold for.

Question 5

Define the term “Added Value”.

Answer 5

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

Question 6

What are the four factors of production?

Answer 6

Land, Labor, Capital, and Enterprise.

Question 7

Define the term “Opportunity Cost”.

Answer 7

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

Question 8

List 3 characteristics of an entrepreneur.

Answer 8

Answers may include :
- Innovator
- Committed
- Risk taker
- Multiskilled
- Leadership skills
- Confident (especially when taking decisions)

Question 9

List 2 impacts of an Enterprise to a country’s economy.

Answer 9

1. Employment creation : The enterprise will most likely look to hire some employees. This will decrease the unemployment rate in that specific country, thus improving the living standards of the local communities.
2. Economic growth : The enterprise will generate an output of goods and services that will increase the gross domestic product (GDP) of that specific country.

Question 10

List the 3 types of businesses.

Answer 10

1. Primary sector
2. Secondary sector
3. Tertiary/Service sector

Question 11

Define the term “Social Enterprise”.

Answer 11

Social are enterprises businesses with the objective to benefit society.

Question 12

What is the difference between a social enterprise and a charity?

Answer 12

Social enterprises make profit to reinvest into the business and provide some returns to the owners. Whereas a charity relies on donations to continue operating.

Question 13

What are the 3 objectives of a social enterprise? (AKA The Triple Bottom Line).

Answer 13

Economic : To make profit and reinvest into the business whilst providing some returns to the owners of the social enterprise.

Social : Providing job opportunities and support to the local community, and often disadvantaged people.

Environmental : To protect the environment and manage the business in an environmentally sustainable way.

Question 14

What are the “Triple Bottom Line”?

Answer 14

1. Economic
2. Social
3. Environmental

These are also known as the objectives of a social enterprise.

Question 15

Define the term “Entrepreneur”

Answer 15

An entrepreneur is an individual that combines all the factors of production and takes the risk to start a business.

Question 16

Define the term “Capital”

Answer 16

Capital refers to the financial assets that a business uses to fund its operations and growth.

Question 17

Explain the term “Resources”

Answer 17

Resources refers to the inputs used to produce goods and services. These are also known as factors of production. The 4 main factors of production are : Land, Labor, Capital, and Enterprise.