Chapter 3 Flashcards
(40 cards)
What is Chapter One about?
Chapter One = Enterprise.
What is the purpose of business activity?
Business activity exists to produce consumer goods or services that meet the needs of customers.
What are consumer goods?
Consumer goods are tangible products sold to the general public, including both durable and non-durable goods.
What are examples of consumer goods?
Examples include cars, food, and hotel accommodation.
What are consumer services?
Consumer services are non-tangible goods offered to the general public, such as insurance and train journeys.
What are the factors of production?
Factors of production are scarce resources used to produce goods and services.
What is land in terms of factors of production?
Land refers to natural resources used to produce goods and services, e.g., oil, land, and gas.
Reward: Rent
What is labor in terms of factors of production?
Labor is the physical and mental efforts used to produce goods and services.
Reward: Wages
What is capital in terms of factors of production?
Capital refers to manmade resources used to produce goods and services, e.g., tools and machines.
Reward: Interest
What does enterprise refer to?
Enterprise refers to the ability to combine the factors of production to produce goods.
What does adding value mean?
Adding value is the difference between the price of the finished goods/services and the cost of the inputs involved in making it.
What are methods of adding value?
Methods include attractive packaging, aesthetic shop fittings, and excellent customer service.
What is the significance of value addition from a customer perspective?
Value addition enhances the perceived worth of a product or service in the eyes of the customers.
What competitive advantage does value addition provide?
Businesses that effectively add value can gain a competitive advantage in the market.
What is the problem of choice?
The problem of choice arises from scarcity, where resources are limited compared to unlimited wants.
What choices must individuals, businesses, and governments make due to scarcity?
They must choose what to produce, how to produce, and whom to produce for.
What is opportunity cost?
Opportunity cost is crucial for efficiently allocating limited resources, aiding in achieving a balance between resources and contributing to economic activity.
What does the dynamic business environment refer to?
The dynamic business environment refers to the constantly changing and evolving conditions in which businesses operate, influenced by various factors such as technology.
What are the components of the dynamic business environment?
Components include technology advances, economic conditions, market trends, and regulatory changes.
How does the dynamic business environment impact businesses?
Businesses need to be adaptable and responsive to changes to remain competitive. It encourages innovation and necessitates effective risk management strategies.
What opportunities does the dynamic environment present?
The dynamic environment presents opportunities for growth, innovation, and gaining a competitive edge.
What do successful businesses exhibit?
Successful businesses often exhibit strong enterprise by fostering innovation and adaptability, with entrepreneurs taking calculated risks to navigate uncertainties.
What are the objectives necessary for business success?
Clear and well-defined objectives are crucial for guiding a business toward success, providing a roadmap for strategic decision-making.
