Revision Exam 1

Question 1

Definition of business

Answer 1

The definition of a business is the name given to firms which provide and distribute goods and services.

Question 2

Describe the four factors of production& give examples.

Answer 2

Natural Resources: raw materials supplied by nature. e.g. cotton, wool, coal, oil.
Labour Resources: human skill and effort. e.g. workers, doctors, employees.
Capital Resources: machinery and technology. e.g. sewing machines, factories.
Enterprise Resources: new ideas. e.g. innovation, creative.

Question 3

Explain the difference between public and private business sectors.

Answer 3

PUBLIC: these are business’ owned by the government. the assets of the business are owned by the people of the nation or the state but the government controls them. e.g. QLD Rail, Ergon Energy.
PRIVATE: the assets or resources of these businesses in this sector are owned by the individuals or by other businesses. e.g Lorna Jane.

Question 4

Define good

Answer 4

a good is an item that you can see and touch. (Tangible)

e.g. Ice-cream, petrol

Question 5

Define service

Answer 5

a service is a task that people perform for others. (Intangible)
e.g. Hairdresser, mechanic, dentist

Question 6

Define consumer

Answer 6

a consumer is a person who purchases goods and services to satisfy needs and wants.

Question 7

Define producer

Answer 7

a producer is a person or business that makes goods and provides services.

Question 8

Define Substitute goods

Answer 8

a substitute good is alternative goods to the purchase we would like to make.
e.g. Butter; margarine, Coke; pepsi

Question 9

Define complementary good

Answer 9

a complementary good is a good bought to more completely satisfy the first good or service purchased.
e.g. when you buy a coffee you also get a piece of cake.

Question 10

Explain the difference between a want & need

Answer 10

a want is a non-essential thing for survival but that we would like to have, something luxury. a need is an essential thing for survival, like water, food and shelter.

Question 11

List the 4 main methods of transport. Give and example and 2 advantages and 2 disadvantages.

Answer 11

ROAD: + speed of delivery, flexible service, less handling and labor costs.
- effected by the weather conditions, permits, licences and fees are needed.
RAIL: + speed over long distances, relatively cheap.
- Double handling (result in damage & costs

Question 12

Demonstrate the distribution chain

Answer 12

Producer: a person or business that makes goods and services
Whole saler- people who deal in whole or unbroken lots.
Retailer- firms that retail or sell goods to the public
Consumer: a person who purchases goods and services to satisfy needs and wants

Question 13

Difference between Private company and public company

Answer 13

A private company is owned by between 2 and 50 people, small to medium size, must have ‘Pty Ltd’ in the name.
A public company is owned by an unlimited number of shareholders, very large in size, must have ‘Ltd’ in the name.

Question 14

State the different types of business ownership.

Answer 14

Sole Trader: a business owned and operated by one person
Partnership: business owned by between 2 and 50 people
Private Company: a company owned by between 2 and 50 shareholders
Public Company: a company owned by an unlimited number of shareholders.

Question 15

Describe the advantages and disadvantages of forming a partnership

Answer 15

+ profits and losses are equally divided, common type of business for people with similar skills, relatively cheap to set up
- unlimited liability

Question 16

List the stages of production and an example for each

Answer 16

PRIMARY STAGE: also known as the extraction stage, involves businesses that work with the raw materials.
SECONDARY STAGE: also known as the manufacturing stage, involves people that transform the raw product into the finished product.
TERTIARY STAGE: also known as the distribution stage, involves the delivering of the finished product to the consumer