unit one: chapter 1- enterprise

Question 1

what are capital goods

Answer 1

the physical goods used by industry to aid in the production of other goods and services such as machines and commercial vehicles

Question 2

define creating value

Answer 2

increasing the difference between the cost of purchasing materials and the price the finished goods are sold for

Question 3

what is added value

Answer 3

the difference between the cost of purchasing the materials and the price they are sold for

Question 4

name 3 things that businesses need

Answer 4

labour, suppliers, customers, land, capital, government, enterprise

Question 5

what is the opportunity cost

Answer 5

the benefit of the next most desired option which is given up

Question 6

give an example of an opportunity cost

Answer 6

any example given eg. a man buys a holiday instead of a new car so the car is the opportunity cost

Question 7

name 2 characteristics of a successful entrepreneur

Answer 7

innovation, commitment, multi skilled, self motivated, leadership skills, self confidence and ability to bounce back

Question 8

name 2 major challenges faced by entrepreneurs

Answer 8

identifying successful business opportunities, sourcing capital (finance), determining a location, competition, building a consumer base

Question 9

name 2 reasons why new businesses often fail

Answer 9

lack of record keeping, lack of cash and working capital, poor management skills, changes in the business environment

Question 10

give an example of a primary, secondary and tertiary sector business

Answer 10

primary- farming, fishing
secondary- dress making, craft manufacturing
tertiary- hairdressing, car repairs

Question 11

name 3 impacts of enterprise on a country’s economy

Answer 11

employment creation, economic growth, firms survival and growth, innovation and technological change, exports, personal development, increased social cohesion

Question 12

what is a social enterprise

Answer 12

a business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners

Question 13

true or false

a social enterprise acts as a charity

Answer 13

false- no because they still require profit or surplus to survive as they can’t rely on donations

Question 14

what is a triple bottom line

Answer 14

the three objectives of social enterprises: economic, social and environmental