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Introduction to business > Exam 1-introduction to business > Flashcards

Exam 1-introduction to business Flashcards

1
Q

What is the meaning of a business?

A

> The name given to firms which produce and distribute goods and services
ONE common objective- TO PRODUCE GOODS AND SEVICES AND TO SELL THEM IN ORDER TO EARN A PROFIT

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2
Q

what is production?

A

Production id the activities that blend economic resources to create goods and service

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3
Q

What are the four factors of production?

A
  1. Natural resources
  2. Labour resources
  3. Capital resources
  4. Enterprise resources
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4
Q

What are natural resources?

A

Raw materials supplied by nature

e.g. water, trees, fruit and vegetables

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5
Q

What are labour resources?

A

Human skill and effort

e.g. Farmers, construction workers, doctors

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6
Q

What are capital resources?

A

Machinery and technology

e.g. factories, computers

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7
Q

What are enterprise resources?

A

New ideas

e.g. innovation, creation, inventions

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8
Q

What is a private business sector?

A

These are businesses owned by the government.

e.g. Ergon Energy, Queensland Rail.

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9
Q

What is a public business sector?

A

These businesses are owned by individuals or by other businesses

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10
Q

What is a good?

A

A good is an item we can see and touch, it is TANGIBLE and it can be a need or a want.
e.g. milk, television

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11
Q

What is a service?

A

A service is a task that people perform for others, is INTANGIBLE.
e.g. getting your haircut at the hairdressers

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12
Q

What is a consumer?

A

A person who purchases goods and services to satisfy their needs and wants.
e.g. Me when I go to Coles

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13
Q

What is a producer?

A

A person or business that makes goods and services.

e.g. a farmer produces milk and meat

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14
Q

What is a substitute good?

A

A good that we purchase as an alternative to what we would really like.
e.g. Nike instead of Asics

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15
Q

What is a complementary good?

A

A good that we purchase to more satisfy the first good or service produced.
e.g. getting a cake WITH a coffee

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16
Q

What is a need?

A

An item that we cannot live without, it is essential for our survival.
e.g. food, water, shelter.

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17
Q

What is want?

A

A good or service we can live without, we would just LIKE to have.
e.g. new pair of shoes

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18
Q

What are various factors that influence a consumers needs and wants?

A

Factors that influence a consumers needs and wants include their social status, their income, where they live, their education and their religion. In wealthy countries people may believe their WANTS are their NEEDS. But, a person in a poor country may WANT clean water, this is really a NEED.

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19
Q

What is transportation?

A

Is a service or tertiary industry involved in the movement of both people and goods from one place to another.

20
Q

What are the four main methods of transport?

A
  1. Road
  2. Rail
  3. Sea
  4. Air
21
Q

What are advantages of road transport?

A

> Speed of delivery
Less handling and labour costs
Door-to-door delivery
Less risk of theft or damage

22
Q

What are disadvantages of road transport?

A

> Expensive over long distances
Can be held up by the weather
Requires licenses, permits and fees

23
Q

What are advantages of rail transport?

A

> Fast over long distances

> Relatively cheap

24
Q

What are disadvantages of rail transport?

A

> double-handling

> Not all places are on a railway line

25
Q

What are advantages of sea transport?

A

> Good for heavy or bulky items
Transports bulk items over long distances
Relatively cheap

26
Q

What are disadvantages of sea transport?

A

> It is slow
Limited number of ports
Service is infrequent to most ports

27
Q

What are advantages of air transport?

A

> Speed of delivery
Safe and reliable
Convenient

28
Q

What are disadvantages of air transport?

A

> Expensive
Double-handling
Lack of airports

29
Q

What is the distribution chain?

A

Producer > wholesaler > retailer > consumer

30
Q

What is a wholesaler?

A

They buy in very large quantities, they then supply them in smaller quantities to retailers

31
Q

What is a retailer?

A

Firms that retail or sell goods to the public.

32
Q

What are the six types of outlets?

A
  1. A corner store
  2. A supermarket
  3. A department store
  4. A chain store
  5. A hypermarket
  6. A specialty store
33
Q

What is a corner store?

A

They sell wide variety of convenience goods, after normal trading hours in local areas.

34
Q

What is a supermarket?

A

A larger store which sells groceries and some inexpensive home wares, independently owned and operated, serve a particular local area.
e.g. IGA, Spar

35
Q

What is a department store?

A

Sells many different type of merchandise of different departments.
e.g. Myers, David Jones

36
Q

What is a chain store?

A

May operate as a super market selling mainly groceries or a variety of inexpensive items. All centrally owned and controlled.
e.g. Coles, Woolworths

37
Q

What is a hypermarket?

A

A larger version of a chain store. Sells a wide range of goods.
e.g. Bunnings, Big W

38
Q

What is specialty store?

A

Specialises in selling a single line of goods.

e.g. Lorna Jane, Rebel

39
Q

what are the different types of business ownership?

A
  1. Sole trader
  2. Partnership
  3. Private company
  4. Public company
40
Q

What are characteristics of a sole trader?

A 
> Owned and operated by an individual
> Often have others working for them
> Unlimited liability
> Very common type of business
e.g. pure and simple home wares, Tarlie B Designs
41
Q

What are characteristics of a partnership?

A

> A business owned by between 2 and 20 people
unlimited liability
Relatively cheap to set up
e.g. K & R plumbing supplies, K & K electrical

42
Q

What are characteristics of a private company?

A

> Owned by between 2 and 50 shareholders
Have limited liability
Must have ‘Pty Ltd’ in name
e.g. Heritage, Hanna’s

43
Q

What are characteristics of a public company?

A 
> Owned by an unlimited amount of shareholders
> limited liability
> very large
> have to have 'Ltd' after company name
e.g. Woolworths, Heritage
44
Q

What are the stages of the production cycle?

A
  1. Primary stage: e.g. cotton bud
  2. Secondary stage: e.g. clothes manufacturers
  3. Tertiary stage: e.g. clothes outlets (Cotton On)
45
Q

How would a person invest in a Public Company?

A

Invest by buying and selling shares on the stock exchange

Introduction to business (8 decks)

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