Introduction Into Business

Question 1

Explain what is meant by an entrepreneur and enterprise

Answer 1

Entrepreneur-a person who sets up a business for the pursuit of profit who risks financial failure
Enterprise- a for-profit business

Question 2

Explain factors of production

Answer 2

Land-The physical space and the natural resources in it eg timber
Labour-The people able to transform resources into goods or services available for purchase
Capital-A company’s physical equipment and the money it uses to buy resources
Enterprise-the entrepreneur that takes the risk to create the business using the 3 factors

Question 3

Evaluate the impact and importance of entrepreneurship to the economy

Answer 3

They stimulate economic growth through the creation of new businesses, this leads to further employment and growth GDP

Question 4

Explain the role of the entrepreneur in making business decisions

Answer 4

An entrepreneur is to determine what to produce, how much to produce, how to produce, where to produce, how to sell it.

Question 5

Evaluate the impact and importance of the entrepreneurial activity for the stakeholders of a business

Answer 5

Shareholders- if successful they will get a return on their investment, however has greater risk of failing
Competitors- can make their business obsolete if its successful, however they have a greater risk of failing than surpassing them
Managers- a successful entrepreneur could allow them to go higher in the market and raise their salaries, however if fails my cause them to feel ‘part of a sinking ship’ and leave

Question 6

Evaluate the impact of the availability of factors of production for the stakeholders of a business

Answer 6

If the business can increase the efficiency of the factors of production then it increases their likelihood of success, this reciprocates to the stakeholders as their interaction with the business is more positive and beneficial

Question 7

Distinguish between primary, secondary and tertiary organisations

Answer 7

Primary- the procurement and processing of raw material eg coal
Secondary- the manufacturing of raw materials into finished & unfinished goods
Tertiary- the provision of services