What Is A Business

Question 1

What is a entrepreneur

Answer 1

An individual with an idea and the skills to start a business. They are willing to accept risk

Question 2

What is an enterprise

Answer 2

The process by which new businesses are formed and new products and services are created

Question 3

Name 5 key characteristics of a entrepreneur

Answer 3

1. determination
2. risk taking
3. vision
4. relevant skills
5. can spot opportunities

Question 4

Advantages of becoming an entrepreneur

Answer 4

1. To become their own boss
2. To keep more of the profits
3. To work their own choice hours

Question 5

How do governments support new firms?

Answer 5

1. lower business taxes
2. legalisation to encourage competition
3. free access to business advice

Question 6

What is the aim of a private sector enterprise?

Answer 6

To survive by making profit

Question 7

An example of a private sector enterprise is…

Answer 7

Sole trader or thousands of shareholders in PLC

Question 8

What is the aim of a private sector enterprise

Answer 8

To provide services to the community

Question 9

What are needs

Answer 9

When you require something essential or important

Question 10

Explain wants

Answer 10

Something you desire to have or possess

Question 11

What is scarcity

Answer 11

When you have high demand for a product or service but have a lack of resources to fulfil the demand

Question 12

What is opportunity cost

Answer 12

The value of the next best alternative forgone when making a choice

Question 13

Difference between a good and a service

Answer 13

Goods are psychical objects which are tangible unlike services which are intangible

Question 14

Name the four factors of production

Answer 14

Capital
Entrepreneurship
Land
Labour

Question 15

How do you improve production efficiency

Answer 15

1. More staff training

2. Advances in technology

Question 16

Name the 3 sectors

Answer 16

Primary secondary and tertiary

Question 17

What does the primary sector do

Answer 17

It’s the firms which involve extracting of raw materials from the land and sea

E.g. Farming

Question 18

What does the secondary sector do

Answer 18

Involves the firm transforming raw goods into semi finished or final goods

E.g. Tyres and petrol

Question 19

What is tertiary sector

Answer 19

When firms provide services or goods to an individual

Question 20

What is adding value

Answer 20

The process of increasing the worth of resources by modifying them in some way

Question 21

What is a business

Answer 21

An organisation that works to fulfil a common purpose