Role Of Business Flashcards
Students learn about: role of business the nature of a business producing goods and services profit, employment, incomes, choice, innovation, entrepreneurship and risk, wealth and quality of life
What is a business?
A business can be defined as the organised effort of individuals to produce and sell products that satisfy individual’s needs and wants for a profit.
What are the 8 roles of a business?
Producing Goods and Services
Profit
Employment
Income
Choice
Innovation and Invention
Entrepreneurship and Risk
Wealth Creation
What is the end result of production in a business?
Answer: The end result of production is a product, which can be either a good or a service.
Differentiate between goods and services.
Answer: Goods are tangible products that we can see, feel, touch, and weigh, while services are intangible activities performed for consumers.
Provide an example of a tangible product.
Answer: Examples of tangible products include food, equipment, and clothes.
Give an example of an intangible service.
Answer: Examples of intangible services include getting makeup/hair done and using an Uber driver.
Define profit in the context of a business.
Answer: Profit is the return or reward that business owners receive for producing products that consumers want and need.
Why is profit essential for a business’s survival?
Answer: Profit is essential for covering day-to-day expenses and ensuring the long-term survival of a business.
What does profit represent for business owners?
Answer: Profit represents the financial gain or reward for the risks and efforts invested by business owners.
How do businesses contribute to employment?
Answer: Businesses employ people to perform various activities within the organization, contributing to job creation.
What percentage of private sector jobs do businesses typically provide?
Answer: Businesses typically provide around 80% of private sector jobs.
What factors influence the number of employees in a business?
Answer: The product being offered and the demand within the business influence the number of employees.
Who receives income from a business?
Answer: Owners, employees, and shareholders receive income from a business.
Explain how employees are remunerated.
Answer: Employees receive wages or salaries in exchange for their labor.
What is a dividend, and who receives it?
Answer: A dividend is a portion of profits paid to shareholders in private/public companies.
How does choice benefit consumers in a market?
Answer: Choice gives consumers the freedom to select from a variety of products for similar purposes.
What does competition driven by consumer choice lead to?
Answer: Consumer choice-driven competition leads to lower prices and encourages innovation.
Give an example of how choice impacts product innovation.
Answer: Competition among smartphone brands leads to continuous innovation in features and technology.
Differentiate between innovation and invention.
Answer: Innovation is the improvement of existing things, while invention is the creation of something new.
How are existing products improved through innovation?
Answer: Research and development (R&D) lead to improvements in existing products through innovation.
What role does research and development (R&D) play in business innovation?
Answer: R&D plays a crucial role in creating new products and enhancing existing ones through innovation.
Define an entrepreneur in the context of a business.
Answer: An entrepreneur organizes business ventures and takes on monetary risks with the aim of making a profit.
Explain the concept of assuming monetary risk in business.
Answer: Entrepreneurs invest their resources and take financial risks in the hope of achieving business success.
How can businesses turn individuals’ ideas into livelihoods?
Answer: Businesses offer individuals the opportunity to turn their innovative ideas into profitable ventures.
How do businesses contribute to economic growth and wealth?
(Job creation - spending - economic growth)
Answer: Businesses create jobs, income, and spending, leading to economic growth, wealth, and increased production.
Describe the relationship between employment, spending, and economic growth.
Answer: Employment leads to income, which drives consumer spending, contributing to economic growth.
Explain how businesses lead to the production of goods and increased employment.
Answer: Businesses create jobs, demand for goods/services, and investment, fostering economic expansion.
How do businesses enhance our standard of living?
Answer: Businesses provide a wide range of products that improve our quality of life.
Give an example of a product that improves quality of life.
Answer: Smart home devices that enhance convenience and energy efficiency.
What impact can a variety of business products have on our lives?
