1 Role of business

Question 1

What is a good?

Answer 1

-A tangible, finished product, ready for consumers to purchase which is physical and can be held.

Question 2

What is a service ?

Answer 2

• An intangible activity that provides support or performs an activity a consumer desires; the quality of the service is based on the skills, qualification, and experience of the employee.

Question 3

What are the roles of business?

Answer 3

Profit
Employment
Income
Choice
innovation
Entrepreneurship and risk
quality of life
Wealth creation

Question 4

What is profit?

Answer 4

Profit is the financial gain a business receives, the difference between the amount earned in sales and the amount spent on purchasing inputs, operating, and producing the finished good.

Profit can also be understood as revenue made by a business minus all deductions.

Question 5

How is profitability defined?

Answer 5

Profitability is the ability of a business to earn a profit over time.

Profitability indicates the financial health and sustainability of a business.

Question 6

What happens if revenue is greater than expenses?

Answer 6

If revenue is greater than expenses, profit has been earned.

This is a basic principle of profit calculation.

Question 7

What is the formula for Gross Profit?

Answer 7

Gross Profit = sales revenue – cost of goods sold.

This calculation indicates how much profit was generated from the cost of manufacturing or purchasing the goods sold.

Question 8

What is the formula for Net Profit?

Answer 8

Net Profit = gross profit – expenses (e.g. rent, employee income, electricity etc.).

This calculation indicates the final profit made by the business.

Question 9

True or False: Profit is calculated by subtracting expenses from revenue.

Answer 9

True.

This is the fundamental calculation for determining profit.

Question 10

What is employment?

Answer 10

An agreement between an employer to pay an employee income for an agreed set of tasks and activities performed by the employee.

Question 11

List the four types of employment.

Answer 11

• Full time
• Part time
• Casual
• Self-employed

Question 12

What role does employment play in the health of the economy?

Answer 12

Provides employment to people in their local community, allows people to earn money and keeps money circulating through the economy.

Question 13

What is a strong link associated with employment?

Answer 13

The level of output produced by a country.

Question 14

What is income?

Answer 14

Amount earned after covering all expenses

Income can be categorized into different types such as profit, dividends, wages, and salaries.

Question 15

Who receives income from a business?

Answer 15

• Business owners
• Shareholders
• Employees

The type of income varies based on the recipient, such as profits for owners and wages for employees.

Question 16

What is the financial payment to an individual in exchange for their labor called?

Answer 16

Wages or salary

This payment can vary based on employment type, such as casual, part-time, or full-time.

Question 17

What do shareholders earn from a public company?

Answer 17

Dividends

Dividends are rewards given to shareholders when the company decides to distribute profits.

Question 18

Fill in the blank: A casual employee typically earns a _______.

Answer 18

Wage

Wages are usually paid on a weekly basis for casual employees.

Question 19

Fill in the blank: A full-time employee typically earns a _______.

Answer 19

Salary

Salaries are generally paid on a monthly basis for part-time and full-time employees.

Question 20

What is the role of an investor in a public company?

Answer 20

Shareholder

Shareholders invest in the company and may earn dividends based on the company’s performance.

Question 21

What is the definition of choice in the context of consumer Behaviour?

Answer 21

The act of selecting amongst alternatives.

Question 22

What does freedom of choice mean for consumers?

Answer 22

Consumers have the freedom and opportunity to purchase products at competitive prices.

Question 23

How does increased competition affect consumer choice?

Answer 23

The more competition, the greater the choice available to consumers.

Question 24

What is the relationship between choice and business behaviour?

Answer 24

Choice encourages businesses to provide goods/services at low prices with high quality and fosters innovation.

Question 25

What are the two main outcomes of consumer choice for businesses?

Answer 25

* Provide goods/services at low prices * Encourage innovation and product differentiation

Question 26

What are the benefits of innovation?

Answer 26

Higher incomes, better quality, lower prices ## Footnote Innovation leads to economic benefits for businesses and consumers.

Question 27

What is the definition of innovation?

Answer 27

The process of generating new ideas and methods to improve features of existing products and creating new products/services.

Question 28

What role do employees play in innovation?

Answer 28

Innovation occurs through the skill and ability of employees and their ideas.

Question 29

What are the challenges associated with implementing innovation?

Answer 29

Costly, high-failure rate in research and development, innovations may not be adopted.

Question 30

What is a cost-effective method for businesses to innovate?

Answer 30

Scanning and learning from competitors.

Question 31

Why is continuous innovation important for a business?

Answer 31

It makes the business better than competitors.

Question 32

How does innovation help maintain a competitive advantage?

Answer 32

By providing features that competitors don't have making your business unique

Question 33

What is entrepreneurship?

Answer 33

The ability to start, operate and assume the risk of a business project in the hopes of making a profit. ## Footnote Entrepreneurship involves transforming ideas into business and providing individuals with the opportunity to turn their ideas and passions into a livelihood.

Question 34

What does entrepreneurship provide to individuals?

Answer 34

Opportunity to turn their ideas and passions into a livelihood. ## Footnote This transformation is essential for individuals who want to monetize their creativity and innovation.

Question 35

What are the two categories of benefits that contribute to quality of life?

Answer 35

Material + non material benefits

Question 36

How do businesses contribute to improving our standard of living?

Answer 36

By offering a vast array of products that improve our standard of living and wellbeing

Question 37

What positive effects does employment have on individuals?

Answer 37

Creates a sense of belonging + Increase in happiness, health, + general wellbeing

Question 38

What does employment provide to individuals?

Answer 38

Income to fulfill life

Question 39

What does CSR stand for in relation to businesses?

Answer 39

Corporate social responsibility

Question 40

What factors can enhance the value of products for consumers?

Answer 40

* High-quality materials * Accessible design * Affordable prices

Question 41

Intermediate goods

Answer 41

products that are used as inputs in the production of other goods or services. They are not sold to consumers directly.

Question 42

Value adding

Answer 42

The main role of business is to add value by undertaking the production process. The production process transforms inputs or raw materials into goods and services. The value of the finished good is worth more than the sum of its parts.

Question 43

Finished products

Answer 43

are goods that have completed the manufacturing process and are ready for sale to consumers or businesses. They don't require further processing.

Question 44

What is a business

Answer 44

An enterprise whose role is to produce and sell, for profit, the products (goods and services) that satisfy individuals needs and wants.

Question 45

how do you satisfy consumers wants and needs?

Answer 45

To satisfy wants and needs, a business must produce consumer demands.