The Purpose and Nature of Businesses Flashcards
Q: What is the difference between needs and wants?
A: Needs are essential for survival (e.g., water, food, shelter), while wants are non-essential desires (e.g., luxury cars, jewelry).
Q: What are the four factors of production?
A: Land (natural resources), Labour (workers), Capital (money/investment), and Enterprise (entrepreneurial effort).
Q: What is opportunity cost?
A: The cost of the next best alternative foregone when making a business decision.
Q: What is the primary sector?
A: The sector that extracts raw materials, such as farming, mining, and fishing.
Q: What is the secondary sector?
A: The sector that manufactures goods from raw materials, such as car production and construction.
Q: What is the tertiary sector?
A: The sector that provides services, such as retail, banking, and transportation.
Q: What is an entrepreneur?
A: A person who starts a business and takes financial risks in hopes of making a profit.
Q: What are the characteristics of an entrepreneur?
A: Hard-working, innovative, organized, and willing to take risks.
Q: What are some objectives of an entrepreneur?
A: Being their own boss, flexible working hours, pursuing an interest, earning more money, identifying a market gap, or dissatisfaction with their current job.
Q: What factors cause businesses to change?
A: Changes in technology, economic situation, legislation, and environmental expectations.
Q: How does technology impact business?
A: Businesses use e-commerce, automation, social media, and AI to improve efficiency and reach customers.
Q: What is inflation?
A: The rate at which prices for goods and services increase, affecting costs and profits.
Q: How do exchange rates affect businesses?
A: A strong currency makes imports cheaper and exports more expensive (SPICED: Strong Pound Imports Cheap, Exports Dear).
Q: What is the Consumer Rights Act 2015?
A: A law ensuring goods must be as described, fit for purpose, and of satisfactory quality.
Q: How can businesses be environmentally friendly?
A: By reducing pollution, tackling deforestation, and using sustainable resources.
