NATURE OF BUSINESS: Role Flashcards
Business Definition
To maximise profit and minimise expenses whilst producing and selling goods & services to consumers in the market
what is Goods and Services
Process of production, the activities undertaken by a business to combine raw materials and inputs to manufacture products ready for consumption.
Tanglible: can be touched
Intangible: unable to touch physically
What are the roles of business (8)
profit, employement, income, choice, innovation, entrepreneurship and risk, wealth, quality of life
What is profit
return or rewars recieved for producing products that conusmers need and wan
REVENUE = Money received from selling g&s
EXPENSES = Money spent in running the business
profit = revenue - expenses
how does profit impact?
The declaration of company profits lifts the confidence of the whole community.
Shareholders: benefit from higher profits by issue of share dividends.
What does employment allow ?
Business: provide jobs
employees: earn income spent throughout the economy - boosts business activity
Employment ALLOWS:
- Income to purchase goods.
- more sold products
What is income, what are the types
- comes from labour.
Wage: Money received hourly/ weekly basis.
Salary: FIXED amount of money paid regularly to a permanent employee.
What is choice
When customers have the freedom to shop and select a wide range of products.
What is entrepreneurship + impact on business
A person who sets up a business or businesses, taking on financial risks in the hope of profit.
Entrepreneurs innovate new products and business ideas.
IF FAILS: They may lose all parts of money that is put into it.
Innovation
Improving or creating a product, service process.
what is wealth
More products sold = More wealth generated in the Australian economy and higher levels of economic growth
what is Quality of life + impact on individual
definition: Well-being of individual through material and non material benefits.
Business provides:
jobs and income
goods and services
Supports government tax = community benefits
