U1: Role of Business Flashcards
1
Q
Entrepeneur
A
A person who organizes, manages, and takes on the risks of starting a business
2
Q
Profit
A
What remains after all business expenses have been deducted from its sales revenue
3
Q
Employment
A
- Private businesses employ approx 85% of Australia’s workforce.
- Around 61% of businesses in Australia don’t employ staff.
- Employment keeps the economy healthy
4
Q
Incomes
A
- Businesses provide income to the owners/shareholders as well as employees. - Provide income as a salary or wage to employees.
- All forms of income are taxed by the government
5
Q
Dividend
A
When a business provides an income to its shareholders
6
Q
Choice
A
Consumers have freedom of choice and the opportunity to purchase products at competitive prices
7
Q
Innovation
A
- Process of creating a new or significantly improved product, service or process
- Super profits arise from being the first business to innovate (don’t last long, businesses catch up)
8
Q
How is wealth distributed?
A
- Government: by taxes
- Business owners/shareholders: profits and/or dividends
- Employess: salaries, wages and benefits
- Lenders: loan repayments
- The business: depreciation, retained profits
9
Q
Impact on Quality of Life
A
- The overall wellbeing of an individual
- Businesses have responded to quality-of-life issues e.g. recyclable materials
- Businesses provide what customers want and don’t want
10
Q
Needs vs Wants
A
- Need: something that humans must have to survive
- Want: something an individual desires but would be able to live without
11
Q
Supply and Demand
A
- To satisy needs and wants, businesses have to produce (supply) the customer’s demand
12
Q
Producing Goods and Services
A
Businesses produce goods and services to:
- meet the needs and wants of a community
- make a profit
