Understanding Business

Question 1

Describe the 4 factors of production.

Answer 1

Land
This refers to natural resources and includes not only the surface of the earth but all other natural resources discovered within it.

Labour
This refers to human resources.

Capital
This refers to human-made resources.

Enterprise
This is the art of bringing together the other factors of production in order to produce goods and services. The Entrepreneur is the risk taker

Question 2

Describe what is meant by a chain of production.

Answer 2

The stages a product passes through from start to finish.

At each stage, value is added to the product. This is known as creating wealth.

Question 3

State the sectors of industry.

Answer 3

Primary

Secondary

Tertiary

Question 4

Describe the private sector.

Answer 4

Organisations owned by private individuals that exist to make a profit.

Question 5

Describe the public sector.

Answer 5

Services and agencies run by the government on our behalf.

Question 6

Describe the third sector.

Answer 6

Non-profit making organisations that exist to support a cause/aim.

Question 7

State 4 aims of the private sector.

Answer 7

Profit maximisation

Achieving quality

Survival

Customer satisfaction

Question 8

Describe a social enterprise.

Answer 8

Social enterprises are organisations that trade and earn income from business but use the profits to help their cause.

Question 9

State 3 ways that organisations ensure customer satisfaction.

Answer 9

Provide the highest possible quality product.

Train employees to the highest standards.

recruit candidates with customer service experience/skills.