The Purpose Of A Business Flashcards

1
Q

What is a business?

A

Organisation that produces and supplies goods and services

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2
Q

Factors of production

A

Land - all natural resources used in production
Labor - all inputs into production by humans
Capital - man made resources used in production eg buildings machinery
Enterprise - the final factor and refers to the skills of people in creating and managing a business.

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3
Q

Objectives of entrepreneur

A
  • entrepreneur have an idea, interest or hobby they wanna turn into business
  • spotted an opportunity- gap in the market and wanna respond
  • like the idea of being own boss, not being answerable to others
  • make more money
  • fit working lives around other commitments
  • may be unhappy with current job
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4
Q

Goods, services needs and wants

A

Goods - a physical product
Service - intangible product - haircut
Want - a person would like to buy
Need - a necessity which person requires

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5
Q

Opportunity cost

A

What is given up as a consequence of a particular choice or decision

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6
Q

Social enterprise

A

A business that is set up to help society rather then make a profit

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7
Q

Primary, secondary and tertiary sectors

A

Primary - first stage of production extracts earths natural resources. Agriculture

Secondary - use raw materials to manufacture goods or construct items - manufacturing

Tertiary - provide services to consumers or other organizations- education

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8
Q

Entrepreneur and enterprise

A

Entrepreneur- someone willing to take a risk involved in starting a new business

Enterprise - another word for a business. Also refers to the skills of people creating and managing a business.

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9
Q

Characteristics of an entrepreneur

A

Willingness to take risk

Hardworking and committed- have a desire to succeed

Innovative - good ideas

Organized - manage business efficiently

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10
Q

The dynamic nature of a business

A

Business space a constantly changing business environment due to

Technological change - new products and methods of production

Economic change - interests rates and exchange rates, inflation, GDP

  • legal change - range of laws and regulations - affects production

Environmental expectations- produce goods without damaging environment

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11
Q

Reasons for starting a business

A
  • Producing goods
  • supplying services
  • distributing services
  • Distributing products
  • Fulfilling a business opportunity
  • Providing goods and services which will benefit others
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