Revision Exam 1

Question 1

What is a definition of business?

Answer 1

We refer to business as the name given to firms which produce and distribute goods and services. Businesses have one common objective - to produce goods and services and to sell them in order to earn profit.

Question 2

What are the four factors of production? Give examples.

Answer 2

1. ) Natural Resources - Raw materials supplied by nature, e.g. Wheat, sugar cane, fruit and vegetables.
2. ) Labour Resources - Human juice and effort, e.g. Hairdresser, doctor, builder.
3. ) Capital Resources - Machinery and technology, e.g. Computers, transport, factories.
4. ) Enterprise Resources - News ideas, innovative.

Question 3

What’s the difference between a public business sector and a private business sector?

Answer 3

A public business or company is owned by an unlimited number of shareholders, The general public may buy and sell shares through the stock exchange. Most are very large. Have limited liability must have the word limited after the company names. Must publish an annual report.

A company owned by 2 or 50 people (shareholders) small to medium Often family owned business. Shares only offered to those people that the business wants, Limited liability.

Question 4

Define the term ‘good’.

Answer 4

Tangible item that is a need or want, e.g. clothes.

Question 5

What is the difference between a need and a want?

Answer 5

A need is something that you need or survival such as food or water. A want is something that you would like to have, e.g. hair straightener.

Question 6

Define the term ‘service’.

Answer 6

A task that a person performs for another, e.g. doctor, hairdresser.

Question 7

Define the term ‘consumer’.

Answer 7

Someone who purchases goods and services to satisfy needs and want.

Question 8

Define the term ‘producer’.

Answer 8

Person or business that makes goods and provides services.

Question 9

Define the term ‘substitute good’.

Answer 9

Alternative goods to the purchase we would like to make, e.g. instead of butter > margarine, coke > pepsi.

Question 10

Define the term ‘complementary good’.

Answer 10

Bought to satisfy the first good or service purchased, e.g. when buying a cup of tea or coffee, a scone may be purchased to compliment the drink.

Question 11

What are the four main methods of transport? Provide an example for each, advantages and disadvantages.

Answer 11

1.) Road
Advantage - good for smaller items, speed of delivery.
Disadvantage - fuel, mechanical issues.
2.) Rail
Advantage - relatively fast over long distances, cheaper than sea and air.
Disadvantage - Double handling, can’t get to all places on a railway line.
3.) Air
Advantage - speed of delivery, high degree of safety and liability.
Disadvantage - high cost, double handling, restrictions on weight and size.
4.) Sea
Advantage - suitable for heavy or bulk items, relatively cheap.
Disadvantage - it’s slow, ships can be affected by bad weather.

Question 12

List of stages in the production cycle.

Answer 12

1. ) Natural resources
2. ) Labour resources
3. ) Capital resources
4. ) Enterprise resources

Question 13

State the different types of business ownership. In a table identify the different characteristics of each type of structure.

Answer 13

(Refer to Word document ‘Term 3 - Ownership Structure’.

Question 14

Explain the difference between a public company and a private company.

Answer 14

A public company can have an unlimited number of shareholders whereas a private company has 2 to 50. A private company is more of a family business and a public business is where the public can buy, sell and exchange. Both do have limited liability though.

Question 15

Create a mind map titled retailers.

Answer 15

(Refer to Word document ‘Term 3 - Ownership Structure’)