Unit 1.1: RoleOfBusiness

Question 1

What is the role of business in society?

Answer 1

Businesses provide a vast array of goods and services, contributing to the economy and our standard of living.

Businesses are essential for meeting the needs and wants of consumers.

Question 2

What percentage of businesses in Australia are small to medium enterprises (SMEs)?

Answer 2

Approximately 98 percent.

SMEs are crucial for the economy, making up the majority of businesses.

Question 3

What is a business?

Answer 3

The organised effort of individuals to produce and sell, for a profit, the products that satisfy individuals’ needs and wants.

Question 4

What is a finished product?

Answer 4

A product that is ready for customers to buy and use.

Question 5

Define production in a business context.

Answer 5

Activities undertaken by the business that combine resources to create products that satisfy customers’ needs and wants.

Question 6

What is the GDP and why is it important?

Answer 6

The gross domestic product (GDP) is the money value of all finished products produced in Australia during one year, indicating economic growth.

Question 7

True or False: The main role of a business is to produce and sell products for a profit.

Answer 7

True.

Question 8

List some roles that studying business can prepare you for.

Answer 8

• Informed consumer
• Successful business owner
• Productive employee
• Informed investor

Question 9

What are goods?

Answer 9

Items that can be seen or touched.

Question 10

What are services?

Answer 10

Things done for you by others.

Question 11

What does profit represent in a business?

Answer 11

The return or reward that business owners receive for producing products that consumers need and want.

Question 12

Fill in the blank: A negative profit, which results when a business’s expenses are greater than its sales revenue, is called a _______.

Answer 12

loss.

Question 13

What is sales revenue?

Answer 13

The money a business receives as payment for its products.

Question 14

What does operating expenses refer to?

Answer 14

All the costs of running the business except the cost of goods sold.

Question 15

How do businesses contribute to employment?

Answer 15

Businesses provide employment to people in their local community.

Question 16

What is the impact of businesses on consumer choice?

Answer 16

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

Question 17

Explain the relationship between profit and business sustainability.

Answer 17

A business must earn a profit to survive; profit is the reward for taking risks in starting and operating a business.

Question 18

What is innovation in the context of business?

Answer 18

The process of improving existing products and creating new products through research and development.

Question 19

How does business activity affect economic growth?

Answer 19

Business activity results in higher levels of economic growth and wealth.

Question 20

What is the significance of entrepreneurship in business?

Answer 20

It provides individuals with the opportunity to turn their ideas and passions into a livelihood.

Question 21

What is the reward for business owners who take risks in starting and operating a business?

Answer 21

Profit

Profit is regarded as the return that business owners receive for producing products that consumers want.

Question 22

What is a negative profit called?

Answer 22

Loss

A loss occurs when a business’s expenses are greater than its sales revenue.

Question 23

How does employment contribute to the economy?

Answer 23

It provides consumers with money to purchase products

Employed individuals use their earnings to buy goods and services, supporting business and creating further job opportunities.

Question 24

What percentage of businesses in Australia do not employ staff?

Answer 24

61 percent

This statistic highlights the prevalence of sole proprietorships or small businesses.

Question 25

Which sector accounts for about 68 percent of all private sector employment in Australia?

Answer 25

SME sector ## Footnote The SME sector has been the major generator of new jobs in the Australian economy.

Question 26

What is the definition of income?

Answer 26

Money received for providing labor or from a business's return on investments ## Footnote Income can come in various forms, including wages, salaries, bonuses, and dividends.

Question 27

What is the difference between a wage and a salary?

Answer 27

A wage is usually paid hourly or daily, while a salary is a fixed regular payment ## Footnote Salaries are often expressed as an annual sum.

Question 28

What is a dividend?

Answer 28

A distribution of a company's profits to shareholders ## Footnote Dividends can be paid yearly or half-yearly and are calculated as a number of cents per share.

Question 29

What does choice refer to in a consumer context?

Answer 29

The act of selecting among alternatives ## Footnote Consumers have the freedom to choose from a variety of products at competitive prices.

Question 30

What is innovation?

Answer 30

Creating a new or significantly improved product, service, or process ## Footnote Innovation often leads to new business opportunities and improved market offerings.

Question 31

What is research and development (R&D)?

Answer 31

A set of activities undertaken to improve existing products and create new products ## Footnote R&D is crucial for maintaining competitiveness and developing innovative solutions.

Question 32

Who is considered an entrepreneur?

Answer 32

A person who starts, operates, and assumes the risk of a business venture ## Footnote Entrepreneurs are willing to take risks in the hope of making a profit.

Question 33

What is the risk associated with entrepreneurship?

Answer 33

The possibility of loss ## Footnote Entrepreneurs face uncertainties regarding consumer demand and the success of their ventures.

Question 34

What was the initial business model of Amazon founded by Jeff Bezos?

Answer 34

An online bookstore ## Footnote Jeff Bezos started Amazon from his bedroom in 1994, later expanding into a diversified e-commerce platform.

Question 35

What role do businesses play in supporting employment growth?

Answer 35

They hire large numbers of people and contribute to job creation ## Footnote Businesses, particularly in the SME sector, are crucial for reducing unemployment rates.

Question 36

What is the unemployment rate in Australia as of September 2020?

Answer 36

6.9 percent ## Footnote This figure reflects the impact of economic factors on employment.

Question 37

Fill in the blank: A sum of money added to a person’s wages as a reward for good performance is called a _______.

Answer 37

Bonus

Question 38

Who topped the list of the world’s richest entrepreneurs in 2020?

Answer 38

Jeff Bezos ## Footnote He founded Amazon in 1994 as an online bookstore.

Question 39

What percentage of young Australians dream of being their own boss according to Xero’s ‘Ageless Entrepreneur’ report?

Answer 39

90 per cent ## Footnote This indicates a strong entrepreneurial aspiration among youth.

Question 40

Name the next four entrepreneurs on the Forbes 2020 Billionaires List after Jeff Bezos.

Answer 40

* Bill Gates * Bernard Arnault * Mark Zuckerberg * Warren Buffett

Question 41

What was the early stage entrepreneurial percentage of Australia’s adult population in 2019?

Answer 41

10.5 per cent ## Footnote This was a decline from 14.6 per cent in 2016.

Question 42

Who is Carolyn Creswell?

Answer 42

The founder of Carman’s Fine Foods.

Question 43

What did Carolyn Creswell initially invest to buy out the homemade muesli business?

Answer 43

$1000

Question 44

How many staff does Carman’s Fine Foods employ?

Answer 44

25 staff at head office and 107 in factories.

Question 45

What qualities do Yolanda Zurack, Jeff Bezos, and Carolyn Creswell share?

Answer 45

* Courage * Motivation * Determination * Energy

Question 46

True or False: An entrepreneur's drive and motivation are essential to the private enterprise system.

Answer 46

True

Question 47

What does the term 'wealth' refer to in the context of business operations?

Answer 47

The profit created by the business after deducting operating expenses.

Question 48

List the entities that receive wealth generated by a business.

Answer 48

* Employees * Business owners/shareholders * Lenders * Governments * The business itself

Question 49

What is quality of life?

Answer 49

The overall wellbeing of an individual, combining material and non-material benefits.

Question 50

What does the Australian Social Progress Index (SPI) measure?

Answer 50

Social progress, not economic factors.

Question 51

What is the main activity of a business?

Answer 51

To produce goods and services.

Question 52

Fill in the blank: Profit is what remains after all business _______ have been deducted from sales revenue.

Answer 52

expenses

Question 53

What role does research and development (R&D) play in business?

Answer 53

It leads to innovation.

Question 54

What percentage of Australia's private sector employment is provided by SMEs?

Answer 54

66 per cent

Question 55

How does a business create wealth within the economy?

Answer 55

By producing goods and services that satisfy consumer wants.

Question 56

What are the two main risks associated with operating a business?

Answer 56

* Financial loss * Market competition

Question 57

What is the significance of taxes collected from businesses?

Answer 57

They provide government revenue for public goods and services.

Question 58

What is a characteristic of successful entrepreneurs like Carolyn Creswell?

Answer 58

Hard work and persistence.

Question 59

What does the wealth created by businesses contribute to society?

Answer 59

Improved living standards and economic growth.

Question 60

True or False: Businesses have no responsibility to address quality-of-life issues.

Answer 60

False

Question 61

What does innovation in business typically lead to?

Answer 61

The creation of new products, services, or processes.

Question 62

What is the role of employees in the wealth creation process?

Answer 62

They receive income which can be spent to satisfy needs and wants.

Question 63

What can happen if all businesses in a community close down overnight?

Answer 63

Increase in poverty and loss of jobs.

Question 64

Name one way businesses can improve quality of life.

Answer 64

Implementing environmentally friendly procedures.

Question 65

What is the primary role of a business?

Answer 65

To produce and sell, for a profit, the products that satisfy individuals’ needs and wants.

Question 66

Define production in the context of business.

Answer 66

Activities undertaken by the business that combine resources to create products that satisfy customers’ needs and wants.

Question 67

What is profit?

Answer 67

What remains after all business expenses have been deducted from sales revenue.

Question 68

What percentage of Australia’s private sector employment is provided by SMEs?

Answer 68

66 percent.

Question 69

List the sources of income generated by businesses.

Answer 69

* Employees (wages, salaries, bonuses, etc.) * Business owners (profits) * Shareholders (dividends)

Question 70

What is the significance of research and development (R&D) in business?

Answer 70

Leads to innovation, which is the creation of new products, services or processes, or the improvement of existing ones.

Question 71

Who is an entrepreneur?

Answer 71

Someone who starts, operates, and assumes the risk of a business venture in the hope of making a profit.

Question 72

What does quality of life refer to?

Answer 72

The overall wellbeing of an individual, combining both material and non-material benefits.

Question 73

True or False: Businesses only produce goods.

Answer 73

False.

Question 74

Fill in the blank: _______ is the ability and willingness to start, operate and assume the risk of a business venture.

Answer 74

[entrepreneurship]

Question 75

What is a finished product?

Answer 75

One that is ready for customers to buy and use.

Question 76

What are operating expenses?

Answer 76

All the costs of running the business except the cost of goods sold.

Question 77

What is the term for money received by workers for services they provide, usually on an hourly basis?

Answer 77

[wage]

Question 78

What is a dividend?

Answer 78

A distribution of a company’s profits to shareholders, calculated as a number of cents per share.

Question 79

How is profit calculated?

Answer 79

Total revenue minus total costs.

Question 80

What do businesses provide to consumers when they buy a product?

Answer 80

Choice.

Question 81

What is the difference between invention and innovation?

Answer 81

* Invention: The development of something new. * Innovation: The improvement of an existing product.

Question 82

How could business improve the quality of life for a society in a non-material way?

Answer 82

By reducing the level of carbon emissions into the atmosphere.

Question 83

What are the costs involved in running a business known as?

Answer 83

[expenses]