unit 1 - final exam

Question 1

What does the transformation process in a business involve?

Answer 1

converting inputs into outputs

Question 2

What are some inputs into businesses?

Answer 2

(AKA - factors of production)
* land (natural resources)
* capital (non-natural resources, machinery + tools etc.)
* labour (quantity and quality of labour will effect value)
* enterprise (ability to be creative and innovative)

Question 3

what can the choice of inputs into a business effect?

Answer 3

• the costs of a business
• The quality of the final product

Question 4

What are outputs of a business (describe them)

Answer 4

Goods
* tangible physical items
Services
* intangible offering

Question 5

what is adding value?

Answer 5

adding value happens during the transformation process - outputs that are produced are worth more than the inputs used

Question 6

what can lead to added value?

Answer 6

• reducing the costs of producing the product
• reducing waste
• improve brand image (through USP or brand)

Question 7

what is a USP?

Answer 7

Unique Selling Point
- feature of a product that makes it stand out from others/competitors in the eyes of the consumer

Question 8

what is a brand?

Answer 8

a name, design, logo, symbol or anything that makes a product recognisable and destinguishes it from others in the eyes of the consumer

Question 9

what are the economic sectors? (describe)

Answer 9

Primary Sector
* harvesting, extracting and conversion of natural resources for the use by other firms
Secondary Sector
* sector of the economy where raw materials are used to create or assemble products
Tertiary Sector
* the sector of the economy which incompases services (outputs intangible)
Quarternary Sector
* Intellectual and knowledge based activities (including IT, R&D etc.)

Question 10

market forces definition

Answer 10

the forces of supply and demand which determine the price of a product and the quantity bought and sold in the market

Question 11

opportunity cost definition

Answer 11

the loss of the next best alternative when making a decision within a business

(based off of the fact that resources are limited)

Question 12

what are some opportunities of starting a business?

Answer 12

• Social Change:
  ageing population - start up care services for elderly
• Technological Change
  growth of electric vehicles and batteries
• Economic Change
  growth in economy - more consumer spending (new markets)
• Environmental Change
  new markets emerging - focus on environment
• Legal Change
  new laws - new possibilities
• Ethical Change
  growing interest in the values of a brand

Question 13

what are some challenges of starting a business?

Answer 13

• lack of experience of all the different aspects of business
• difficulties raising money to set up and expand (limited start-up capital)
• difficulties building brand awareness
• lack of market power - business small
• unexpected external factors (disease)

Question 14

reasons to start a business

Answer 14

• profit
• autonomy
• challenge (personal satisfaction)
• job security (can’t get fired)
• pursuing passion or hobby