POB STUDY GUIDE

Question 1

What is the nature of business?

Answer 1

The basic purpose of all businesses is to satisfy the needs and wants of consumers by producing goods and services for profit.

Businesses help the economy grow by creating jobs, paying taxes, and promoting trade.

Question 2

Define needs and wants.

Answer 2

Needs are essential items (e.g., food, water), while wants are extras (e.g., vacations, games).

Question 3

Differentiate between goods and services.

Answer 3

Goods are physical products (e.g., clothes), while services are actions performed for others (e.g., haircuts).

Question 4

What is profit?

Answer 4

Profit is the money left after expenses, calculated as Revenue – Expenses.

Question 5

List the three sectors of business.

Answer 5

• Primary: raw materials (farming, mining)
• Secondary: manufacturing (factories)
• Tertiary: services (banking, retail)

Question 6

Why does business matter?

Answer 6

• Creates jobs
• Encourages innovation
• Satisfies needs and wants
• Supports government through taxes

Question 7

Provide examples of businesses in different sectors.

Answer 7

• Supermarket → goods (tertiary)
• Tailor → goods (secondary)
• Delivery service → service (tertiary)
• Fisherman → raw materials (primary)

Question 8

List pros of business in society.

Answer 8

• Creates employment
• Encourages creativity
• Raises standard of living

Question 9

List cons of business in society.

Answer 9

• May cause pollution
• Can exploit workers
• Some products may harm (e.g., cigarettes)

Question 10

What is the internal organizational environment?

Answer 10

The structure, culture, and resources within a business that influence how it operates.

Question 11

What are examples of organizational structures?

Answer 11

• Small bakery → flat structure
• Large hotel → tall structure

Question 12

List pros of a flat organizational structure.

Answer 12

• Fast decisions
• Close communication

Question 13

List cons of a flat organizational structure.

Answer 13

May lack supervision.

Question 14

List pros of a tall organizational structure.

Answer 14

• Clear hierarchy
• Defined roles

Question 15

List cons of a tall organizational structure.

Answer 15

Slower communication.

Question 16

What does establishing a business involve?

Answer 16

Planning, registering, and setting up the operations of a new business.

Question 17

What are the types of business?

Answer 17

• Sole trader
• Partnership
• Co-operative
• Company

Question 18

What should a business plan include?

Answer 18

• Goals
• Operations
• Finances

Question 19

What are sources of finance for a business?

Answer 19

• Savings
• Loans
• Family help

Question 20

What are the pros of being a sole trader?

Answer 20

• Easy to set up
• Full control

Question 21

What are the cons of being a sole trader?

Answer 21

• Unlimited liability
• Limited capital

Question 22

What do legal aspects of business refer to?

Answer 22

The laws and regulations a business must follow to operate legally and fairly.

Question 23

Why is understanding legal aspects important for businesses?

Answer 23

To operate lawfully, protect their rights, and avoid penalties.

Question 24

What are key legal areas for businesses?

Answer 24

• Registration
• Contracts
• Consumer protection
• Labor laws
• Health & safety
• Taxes

Question 25

What is the role of producers and consumers?

Answer 25

Producers make goods or services; consumers use or buy them.

Question 26

List types of producers.

Answer 26

* Primary: farming, fishing * Secondary: manufacturing, clothes-making * Tertiary: services, teaching

Question 27

What are the pros of the consumer role?

Answer 27

* Drives innovation * Supports the economy

Question 28

What are the cons of the consumer role?

Answer 28

* Can lead to waste (overconsumption) * Demand for unethical goods (fast fashion)

Question 29

What is social accounting?

Answer 29

Social accounting tracks how a business affects society.

Question 30

How does global trade affect businesses?

Answer 30

Global trade involves buying and selling goods/services between countries.

Question 31

What are the pros of social accounting?

Answer 31

* Good public image

Question 32

What are the pros of global trade?

Answer 32

* More markets * New products

Question 33

What are the cons of global trade?

Answer 33

Expensive, affects local businesses.

Question 34

Why do consumers need protection?

Answer 34

To ensure they are treated fairly and not misled.

Question 35

List consumer rights.

Answer 35

* Right to safety * Right to choose * Right to be informed * Right to redress

Question 36

What are the pros of consumer protection?

Answer 36

* Safer shopping * Confidence * Fair prices

Question 37

What are the cons of consumer protection?

Answer 37

Higher costs for businesses.

Question 38

How does technology help businesses?

Answer 38

It improves efficiency, communication, marketing, and decision-making.

Question 39

Provide examples of technology in business.

Answer 39

* Spreadsheets → accounting * Social media → marketing * Cloud storage → data saving

Question 40

What are the pros of technology in business?

Answer 40

* Faster, better communication * Reaches more customers

Question 41

What are the cons of technology in business?

Answer 41

* Costly setup * Needs training * Cyber risks

Question 42

What steps are involved in starting a business?

Answer 42

* Idea * Research * Business plan * Registration/license * Get capital * Launch/sell

Question 43

What are the pros of starting a business?

Answer 43

* Be your own boss * Make decisions

Question 44

What are the cons of starting a business?

Answer 44

* Risky * Costly * Stressful