Chapter 1 (Enterprise)

Question 1

what are Consumer goods?

Answer 1

The physical and tangible goods sold to the general public. E.g Cars, food and sweets

Question 2

What are Consumer services?

Answer 2

The non tangible goods sold to the general public. E.g hotel accommodation, insurance services and train journeys

Question 3

what are Capital goods?

Answer 3

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

Question 4

What are the factors of production?

Answer 4

The resources needed by businesses to produce goods and services:(C.E.L.L)

• Capital- money/capital goods( main resources used in production
• Enterprise- Driven force by risk-taking individuals that combines other factors of production to into a unit capable of producing goods and services.
• Land- not just land but also renewable and nonrenewable resources of nature
• Labour- manual and skilled labour make up the workforce of the business

Question 5

what is Added value?

Answer 5

Added value is the difference between the cost of purchasing raw materials and the price the finished goods are sold for.

Question 6

What is an Entrepreneur?

Answer 6

Entrepreneur is someone who takes the financial risks of starting and managing a new venture.

Question 7

Explain the 6 characteristics of a successful entrepreneur

Answer 7

• Innovative: Must be able to carve a new niche market, come out as different from other businesses
• Commitment and self-motivation:
• Multi-skilled: Requires many different qualities, such as being keen to learn technical skills, able to get on with people and good at handling money and keeping accounting records.
• Leadership skills-
• Self-confidence and an ability to bounce back
• Risk tacking: must be willing to take risks in order to see results.

Question 8

What are the challenges faced by entrepreneurs?

Answer 8

• Identifying successful business opportunities
• Sourcing capital
• Determining a location
• Competition
• Building a customer base

Question 9

Why do new business often fail>

Answer 9

• Lack of record keeping
• Lack of working capital
• Poor management skills
• Changes in business environment

Question 10

What are the impacts of enterprise on a country’s economy?

Answer 10

• Employment creation
• Economic growth: any increase in output of goods will increase the gross domestic product of the economy.
• Firms’ survival and growth
• innovation and technological change
• Exports
• Personal development

Question 11

What is social enterprise?

Answer 11

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

Question 12

What are the social enterprise objectives?

Answer 12

• Known as triple bottom line
• economic: make a profit to reinvest back into the business and provide some return to owners
• social: provide jobs or support for local, often disadvantaged communities.
• Environmental: to protect the environment and to manage the business in an environmentally sustainable way

Question 13

what is triple bottom line?

Answer 13

triple bottom line is the three objectives of social enterprise; economical, social and environmental.

Question 14

What is a need?

Answer 14

A need is something that is essential for life. There are five basic needs: water, food, shelter, clothing and medical attention

Question 15

What is a want?

Answer 15

A want is something that people desire to have – wants are not essential for life. Most people have unlimited wants as manufactured items wear out and people always want something