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Pst311l Entrepreneur& Economics > Exam Guideline Questions > Flashcards

Exam Guideline Questions Flashcards

1
Q

Production factors

Nb

A

natural resources (water, gold, diamonds) / raw materials
•work/ labour
• money /capital (equipment, machinery)
• entrepreneurship ( ability combine other 3 production factors to deliver service / product

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2
Q

**rights of consumer

A
  • RIGHT TO CORRECT INFO ( only make decision if have correct info. must be protected against dishonest +misleading info)
  • RIGHT TO SAFETY ( right buy safe products e.g expiry dates)
  • RIGHT TO FREE CHOICE ( choose b.ween variety of products)
  • RIGHT OBTAIN PRODUCTS / SERVICES AT REALISTIC PRICE (price should reflect value )
  • RIGHT MAKE THEIR NEEDS KNOWN (able voice needs as to kind products they want +quality they expect)
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3
Q

What needs to be produced

A

•study needs of consumers
• a producer wants to sell his product to a consumer
• process of exchange must take place
….consumer wants the specific producers product + prepared to pay for it

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4
Q

Consumer +retailer

A

Consumers :
- Obtain information from sales personnel, advertisements + labels
- Buy products + choose between variety of products they want
•pay cash for products
•buy the goods from wholesalers who produce large amounts at a time.
• wholesalers only sell certain goods…visit diff wholesalers to satisfy basic needs .

Retailers :
•deliver the services to other consumers
•bring goods within easy reach of the consumers.
• sell goods according to the quantity required by the consumers.
• deliver good to well know trademarks +companies +client.
• should make goods available to their clients.
• have a right to make profits (compensate them for the service they deliver)
• shopkeepers grant credit to clients until receive their wages / salary
• provide in the daily needs of their clients by making fresh bread, meat, milk, fruit +veg available to them
• advertisements (shopkeepers notify consumers of new products, changes in fashion +price changes)

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5
Q

How to produce

A
  • material needed for production is limited
  • make careful choices with regard to their production techniques
  • production process must be efficient +economical
  • cost of productions +prices consumers willing to pay, must be balanced
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6
Q

For whom to produce

A
  • production of a article / service is usually directed at a specific ara of the consumer market.
  • producers need to analyse their prospective clients needs (see how differ from diff sections of market)
  • e.g if want produce clothes, must establish what clothes, styles + colours learners prefer.
  • greatest consideration is price
  • offer product at reasonable price
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7
Q

Instrincic motivation

A
  • Motivation is “will to enrich oneself inwardly”
  • wants to perform because they find the task at hand interesting + informative
  • It leads to self-actualisation
  • Derives more satisfaction from success at studying than from the idea for e.g passing matric
  • goal orientated
  • concentrated on learning tasks
  • practises, studies, intellectual curiosity
  • sets own standards
  • uses responsible study methods, determined to study, values meaning of studying
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8
Q

Extrincic motivation

A

act because something or someone has prompted them or will reward them
- impress or satisfy others
- Shows no enthusiasm and exhibits no initiative or creativity
•uncertain, doubt own abilities
• not creative, no desire to know more than needed
• seek to achieve short tem goals
• rely on others assistance
• anxious +tense due to thought of failure
• strive for social approval

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9
Q

Educators balance extrincic + instrincic motivation

A
  • Teacher should have realistic expectations of what learners can achieve
  • Always praise success and achievement
  • Show genuine interest in the learner and everything he/she does
  • Support and encourage adolescents who are unsuccessful
  • Avoid negative situations
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10
Q

How will a primary school teacher use extrinsic motivation IN CLASSROOM
(NB)

A

•utilize learners interaction, to help them create sense of worthy, adequate +successful
(compliment them, smile warmly)
• give attention to learners social needs
• satisfy learners need for appreciation +esteem (display recognition & appreciation for what they are +achieve)
• ample opportunity for pupil to experience success +develop sense of personal +worthwhile achievements (teacher must set achievement expectations at a realistic level)

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11
Q

Classify unemployment

NB

A

between 15 +65 yrs
• unemployed
• available to do paid work
• actively seeks paid wo

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12
Q

Result of unemployment

NB

A

peoples pride +dignity affected +std living drops /sell homes / possesions
• society suffers consequences (increase crime +frustration, violence)
• loss of valuable +potential skills
• negative effect on peoples perception of the success of the market economy (get idea market cannot solve the unemployment problem +is responsible for high unemployment rate)
• macroeconomic consequences of unemployment = country cant achieve full potential in production of goods +services. Gross domestic product = lower, fewer consumer goods available, less investment
• microeconomic consequences of unemployment= people dependent on others, machinery stand idle…affects future production
• more murders , fatal heart attacks, more liver-related diseased, mental illnesses etc
• nervous tension (more 1 yr unemployed) & shorten life expectancy by 5 yrs

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13
Q

Reasons / causes unemployment

(NB

A
  • SA lowest productivity figures in world
  • population growth highest in Africa
  • mechanisation of economy is proceeding too rapidly
  • people entering job market without qualifications / skills due lack of schooling +training
  • society’s needs=changed / diminished (labour pool exceeds demand)
  • seasonal workers unemployed at end of season
  • 29% still illiterate
  • education system struggles to produce matriculants with mathematical skills
  • learners choose learning rogrammesthat don’t provide access to careers on offer
  • few engage in further studies
  • youth more involved in crime
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14
Q

Solutions of unemployment

A

general education
• maintaining law +order
• establish entrepreneurial culture
• be informed about whats going on in the world
• strong sense of personal commitment
• identify the needs of your community
• tell young learners abot job strategies

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15
Q

**productivity

A

Is in essence the relation between real output (volume of goods and services produced)

  • The amount of input used to procure the output.
  • Described as average amount or number of products that every labourer produce per hour
  • Can be expressed as follows Productivity = Measure of the output/measure of input
  • Example Production over capital and labour
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16
Q

HOW START / RUN A BUSINESS

NB

A

STEP 1: ASSESS OWN ABILITIES + KNOWLEDGE OF BUSINESS:

a) chosing form business suitable for yourself:
• kind of product / service
• volume of product / service
• long-tem existence of business
• liability of members / stakeholders
• obtaining capital
• profit & profit sharing
• income tax assessment
• legislation requirements

b) different forms / TYPE of business in private sector

STEP 2: CONSIDER FEASIBILITY OF YOUR BUSINESS IDEA
• is business idea feasible (chance of success) + viable(will it make profit)?
• protecting business idea ( secrecy, patents, trademarks, copyright)
STEP 3: BUSINESS PLAN
STEP 4: STARTING BUSINESS

17
Q

Payments to the franchiser are stipulated in the contract. What would you consider to be the ASPECTS OF GENERAL CONTRACT PROVISIONS

A
  • Expiry date of the contract
  • start up date for the franchise
  • Franchisee has the option to renew the contract
  • Franchisee will have exclusive rights to trade in a geographical area
  • Franchiser will not be liable for the actions of the franchisee
  • Franchisee is an independent contractor and not an employee of the franchiser
  • Franchiser must approve the business site
  • Franchisee should obey all the laws and regulations
  • Franchiser may not disclose information about the franchisee and the business
  • Franchisee may not disclose info in respect of the franchise operation.
18
Q

**Describe how the following instruments become necessary to make a plan work: (Marketing plan) (4P’s)

(NB)

A

1) Product
• satisfy needs and offered service to consumers
•concentrate on consumer products
• 1) Consumer products depend on durable qualities (furniture) and non durable (sweets)
• 2) Products can be divided into convenience, selective and speciality products
• Convenience (groceries)knows them well
• selective (jewellery) compare at shops for quality and price
• Speciality products (motor cars) make special efforts so buy
• Other aspect such as trademarks and packaging is also considered

2) Price
• amount of money hand over in exchange for products
• related to value
• Price of product is determined by – cost price of product – running cost of business – reasonable profit

3) Place
• where situated plays a important role
• prefer to purchase at a business situated near their homes
Reasons contributing to popularity of a business is the place
• Sufficient parking area , reasonable prices
• Suffiecient security and service available
• Suffiencient space for movement between shelves
• Conveinient business hours
• Reliable delivery services and regular special offers
• Clean and neat in and about the shop

4) Promotion
• all the techniques used to create a demand for a new product
• Main purpose :to inform, remind or persuade consumers to purchase products

Promotion divided into:

1) Advertising – mass communication that takes place on impersonal level and sponsor pays
2) Personal sales – communication from person to person (sales representatives fulfil important role)
3) Sales promotion methods – short term and encouragement of consumers to purchase a product (Free samples, bonus articles and discount coupons)
4) Publicity – Giving newsworthy info to the media (Sponsorship and news conferences)

19
Q

how the following issues should be interwoven with economic literacy in primary school:

Buying+selling
Quality goods

A
  • *Buying and selling- Happens on a daily basis and the buyer and seller has to reach an agreement (sales agreement / sales contract)
  • When goods exchange hands a sales contract is entered into the buyer and seller
  • Buyer undertakes to pay the money
  • seller undertakes to hand over the article
  • have to agree on the item which is bought and price to be paid
  • *Quality of goods – sellers indicate the quality of goods by
    1) A description – the seller describes the quality
    2) A sample – seller sends a sample as example to the buyer
    3) A trademark – seller puts a special mark or sign on the product. ( mark must be registered +may not be used by others : to show that his product)
20
Q

Factors influencing profit

NB

A

KIND OF BUSINESS: grocery shop in big deman (make more money) than clothing shop
•
•ELEMENTS OF RISK: well-established industries, uncertainty is small +pure profits inclined to be low. Greater uncertainty, greater expectations for profit +loss. Expecially when new products= launched
•
•COMPETENCE OF ENTREPRENEUR: efficient running of business, good organisation, optimising use of manpower +materials, keep unit costs down…this makes one business differ from other
•
•TUNROVER +MARKET SIZE: if market large,larger profit can be made, increase turnover, lowering unit costs
•
•NEW PRODUCTION TECHNIQUES: strong competition & striving to max profits-encourage entrepreneur to develop +apply new production techniques to improve efficiency= higher profits
•
•BUSINESS CYCLES: during times of prosperity(profits high) +during depression (losses) due to price rise +drop faster than costs
•
•RISE IN UNFORSEEN COSTS: (irrecoverable debts, accidents, dated equipment. drop in demand, disaster +strikes= big influence on profit (profit 1 yr, loss next yr)
•
•COMPETITION +PRICE WARS: businesss can go under / profits dropping to minimum

21
Q

Cashflow

A

forecast shows how much cash expected to come in +go out of business each month. Ensures you don’t run out of cash

Steps to compile a cash flow:
Step 1: Cash flow at the beginning of the month to start with
• amount of cash you expect to have in the cash box + amount in your bank account at the start

Step 2: Cash flow from sales
• Amount you forecast for cash
• Sales and cost plan can be helpful (wages and rent)
• The profit you might have during the next month

Step 3: any other cash in
Step 4: total cash in

Step 5: Cash out for costs
• Amount of cash you forecast your business can expect to pay in the specific month
• Like goods, materials, wages and transport

Step 6: Cash out for planned investment in equipment
• If you will buy any equipment during the month

Step 7: any other cash out
Step 8: total cash out
Step 9: cash at end month

22
Q

Characteristics +advantages of 1 man business

A
  • no legal entity (Owner and business cannot be separated)
  • no continuity (Death of the owner will dissolve the business)
  • Transfer of a sole ownership can be accomplished by selling or transferring it to another person
  • Owner is liable for all the debts and claims
  • Personal belongings of the owner can become involved with debts
  • Profits belong to the owner (Serves as motivation to manage the business)
  • Capital comes from personal funds (Security must be funded)
  • Owner manages the business and must adapt to changes easily
  • Legal requirements for establishment are few and simple
  • Taxation is calculated only on taxable income of the owner

Advantages of a one-man business
• Easy to establish with only a few legal requirements
• All profits go to the owner
• Capable person will gain experience quickly
• Owner can be innovative and free to make choices
• Owner is motivated to be diligent and hardworking
• Can easily adapt to environmental changes

23
Q

Factors that have direct influence on the choice of business

A
  • kind product / service
  • volume of product / service
  • Economic independence of the business
  • Continuity or the long term existence of the business
  • Liability of members + shareholders
  • Managements participation
  • possibilities of obtaining capital
  • Possibilities for profit and profit- sharing
  • Income + tax assessment
  • legislation requirements
24
Q

Cash budget

A

detailed income statement, making sure funds available to meet obligations .

Explain the role of each of the following in a CASH BUDGET:
1) Information needed to compile a cash budget
• The bank sheet and bank balance at the beginning of the budgeting period
• Expected cash and credit sales
• Payments from debtors
• Credit condition for the debtors
• Expected cash and credit purchases of trading stock
• Payments to creditors
• Credit conditions for creditors and credit purchases
• Other specified payments and receipts

2) Information contained in the cash budget
• Estimated cash to be received mainly from debtors from cash sales
• Cash to be paid for cash purchases and payment of credit purchases to creditors
• Bank balance at beginning of the month
• Estimated bank balance at the end of the month

25
Q

NELSONS CLASSIFICATION OF VALUES: what influences career choices:

Can be asked:
How will the following categories of value play a role in Economic Literacy and Entrepreneurship:

(NB)

A
  • SECURITY: person values security, may rejet bigger opportunities for safety of medical aid, pension, secure monthly income etc.
  • STATUS: status by community ( minister, doctors), status through power ( directors of companies) +status through symbols (expensive cars, house, clothing etc.)
  • MONEY: need to determine how much one values money (poor man appreciates money, more than someone accustomed to wealth)
  • INDEPENDENCE: people find difficult to work under supervision +never happy in large company. Rather work long hours in own business
  • SOCIABILITY: enjoy working with people (social work, teaching, nursing etc.)
  • CREATIVITY: many creative people will forfeit financial gain +job security in favour of deeper satisfaction from pursing their talents
26
Q

Unique characteristics of Economic Management Sciences:

NB

A

1)Economic problems
• Concerns the distribution of resources in society
• Attempts to contextualise the phenomena of society’s unlimited wants and needs against limited resources
• Examined the legacy of injustice in the country

2) Economic cycle
• Covers the flow of money, goods and services between households, businesses and the government or foreign sector
• Examines the role and responsibilities of various participants in the conomic

3) Reconstruction, sustainable growth and development
• Develops a critical approach to restibution
• Holds the position that a “blanced” economy is desirable
• Economy that’s geared towards sustainable growth
• Reducing provery and distributing proseperity

4) Leadership and management
• Basic aspects of leadership (planning and management)
• Negotiation and motivation as well as delegation and conflict management
• Management work such as administration + fincances and production processes
• Rights and responsibilities of magagement and workers
• Marketing and public relations of human resources

27
Q

Requirement for good currency

A

1) Generally accepted – must be accepted all over the world for example Gold.
2) Durable – currency should not lose its value through wear and tear. They can be melted together and coins therefore very popular as means of payment.
3) Easily to handle – should be light in comparison to its value
​- Paper money plays a important role
4) Homogenous and easy to handle and divide up – coins in every denomination should be identical in apprearance and value
5) Easy to recognise – easily distinguished from other metals and coins
6) Stable – units of measure (length, mass and volume) should never change
​- must have a stable value but not possible with inflation
7) Scarcity – should not be too freely available it can lose its value
​- must be available in sufficient supply to enable the exchange of goods

28
Q

Instrument associated with money

A

1) Cheques- Most big companies make use of this to do payments that has a lot of money related to.
• The account holder uses a written instruction ordering his/ her bank to pay money into a specific persons account.
• It can also be used to order things and they pay by using a cheque.
• Cheques make it easier to do business due to the fact that it’s not safe to carry large sums of money around.
• Important for cheques to be filled out correctly with the right details and to be looked after until payments are made

2) Postal orders – they have counterfoils that ensure that the money will not be paid to anyone other than the stipulated person.
• For example SACE payments must be done by postal orders.
• Postal orders can be paid at the post office itself.
• It is very important that the details on the order are filled in correctly and that the company’s name is clearly written on the paper.
• To avoid money being paid to a wrong company or person we double check the details.

3) Credit cards – Financial institutions issue credit cards.
• They can also be obtained from commercial banks like Absa, First National bank, Standard bank, and others.
• Credit cards make it easier for users to carry bigger amounts of money
• It is convenient for people who travel a lot or use it to pay big amounts.
• Credit cards are important in our lives, but people can misuse it, one must always pay the account at the end of each month.

4) Budget is important especially when it comes to saving and spending your money.
• A budget can also show you what you need to pay and how much.

5) Savings – Best way to save is by opening a bank account and to deposit a fixed amount every month, and only use it when needed.
• You earn interest so the more you save the better.

Pst311l Entrepreneur& Economics (8 decks)

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