Topic 1.1 Flashcards
1
Q
What is the difference between a good and a service?
A
Good - tangible item
Service - tangible act/action performed
2
Q
Why do new business ideas come about?
A
- Changes in technology
- Changes in what consumers want
- Goods and services become obsolete
3
Q
How do new business ideas come about?
A
- To solve a problem
- Adapt to keep up with changes in trends
4
Q
Risks in business
A
- Financial loss
- Lack of security
- Business failure
5
Q
Rewards in business
A
- business idea becomes a success
- Profit
- Independence
6
Q
Profit formula
A
Total revenue - total costs = profit
7
Q
4 factors of production
A
- Land
- Labour
- Capital (equipment & machinery)
- Enterprise (motivation to start)
8
Q
Definition: added value
A
difference between what a business pays its suppliers and the price it is able to charge for its product/service
9
Q
Ways to add value
A
- Design
- USP
- Quality
- Branding
- Convenience
10
Q
Role of an entrepreneur
A
- risk taking
- make business decisions
- organise resources
