Enterprise

Question 1

What do businesses do/ purpose of business activity?

Answer 1

1. Identifies needs of customers
2. Purchase necessary resources to allow production to take place
3. Produce good and services, satisfying the customer’s needs.

•with the aim of PROFIT

Question 2

Factors of production(FOP) needed by business

Answer 2

1. Land
2. Labour
3. Capital
4. Enterprise

Other resources
(Government, customers, suppliers)

Question 3

How does Government help a business?

Answer 3

Provides
1. Law and order
2. Roads and railways
3. Schools/colleges

Question 4

Define Land as a FOP

Answer 4

Land includes not only the land itself but also the renewable and non-renewable resources of nature, like coal, crude oil and timber.

Question 5

Define Labour

Answer 5

Skilled and unskilled (manual) laboure make up the workforce of a business

Question 6

Define capital

Answer 6

Includes the finance needed to start the business and the finance required to continue operations, it also includes all the manufactured resources used in production (capital goods).

Question 7

Define Enterprise

Answer 7

Risk-taking people called entrepreneurs combine all other FOPs into a unit which is capable of producing goods and services. Enterprise provides the managing, decision-making and coordinating roles.

Question 8

What is the concept of “adding value”

Answer 8

Businesses aim to create value by producing goods and services and selling them for a higher price than the cost of bought-in material. This is called “adding value”

(Gap b/w selling price and cost price)

Question 9

Why is added value important for businesses?

Answer 9

Added value helos a business survive as through added value businesses pay other costs like rent, wages etc.
Investors also expect financial return from the business.
Profit made also helps a business be stable and be able to expand and experiment.