Introduction to business - Enterprise Flashcards
enterprise
what are the two meanings of enterprise?
- another word for business
- the actions of a risk taker starting their business
what makes a ‘risk-taker’?
- shows initiative to exploit a business opportunity
- makes an investment to set up the business
- goes ahead, despite the risks when starting a business
characteristics of a good entrepreneur
- motivated
- determined
- hard-working
- leader
- creative
- enthusiastic
- confident
- persistent
what are the risks to an entrepreneur when starting a business?
- financial loss
- strained relationships
- competitors
- business plan may not be realistic
- may not be a demand for the product
- resource availability
what is an opportunity cost?
an option that is not chosen (it is the cost of the next best alternative)
what are some economic and competitive uncertainties?
laws, minimum wages, interest rates
what are some rewards of being an entrepreneur?
money, satisfaction, reward
what are the positive impacts of entrepreneurial activities on the economy?
- creates jobs –> tax
- GDP increases
- competition
how is competition good for the economy?
companies then need to innovate their product and potentially find ways to lower their prices –> good for customers –> more sales –> more profit –> more GDP
how can competition be bad for the economy?
if the business fails then the government will get less tax and the GDP will be lower
what are the factors of production?
land, labour, capital, enterprise
what is the land section of production?
natural resources available for production e.g. coal
in its natural state
what is the labour section of production?
the human input into production process
a business needs an abundance of skilled labour to be effective
what is the capital section of production?
goods used in the supply of other products
e.g. machinery makes it more efficient and productive
what is the enterprise section of production?
entrepreneurs organise factors of production and take risks
countries with more risk-takers thrive more and have a higher GDP
