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level: Level 1

Questions and Answers List

level questions: Level 1

QuestionAnswer
Internal tradedomestic or home trade concerned with buying and selling of goods and services within the boundary of the country
types of internal trade1)whole trade 2)retail trade
whole tradepurchased goods sold in bulk
retail tradepurchased goods sold in smaller quantity for final consumption
external tradeexchange of goods and services between persons operating in 2or more countries.
types of external trade1)import trade 2)export trade 3)entrepot trade
import tradegoods purchased from another country
export tradesold to other countries
entrepot tradewhen goods are imported for export to other countries
Auxiliaries to trade1)transport communication 2)banking and finance
Auxiliaries to trade-insurance -ware housing
Auxiliaries to trade-advertising -education
Purpose of business-acquire resources -Prouductivity
Purpose of bussiness-Market standing -co-ordinating and motivating workers
Purpose of business-Profit earning -responsible to society
Transformation processan activity that takes input transforms them and produces outputs for customers
Transformation process includes1)input 2)output 3)transformation process
input includes-land -labor -intellctual capital -capital
landlocation of the bussiness
laborthe amount of physical and mental efforts put in the creation of goods and services
capitalmoney invested in the business
intellectual capitalintelligence of the workforce
Transformation process-Changing the characteristics of materials, information and customers. -Changing the location of materials, information and customers. -changing ownership of material
Changing the characteristics of materials, information and customers.material: converting raw materials into finished products information:accountants take receipts and vouchers and making sets of accounts customers: beauty salon and cosmetic surgeons changing peoples appearance
changing the location of materials and informationships and air transports peoples goods from 1 place to another google helps to change location and information
change ownership of materialswhole sellers buy in bulk from number of producers selling it to retailers
outputform of goods and services or combination of both
goodall the tangible items made to be sold and can be produced in advance and store them
serviceall the action and facilites given to consumers
creating valuevalue is created when outputs produced are worth more than inputs
adding valueincreasing its created value
how can a manufacturing business add value?1) ensuring best price for raw materials 2)increasing benefit of the product in the eye of the customer 2) reducing mistake and wages
factors effecting business enviroment-internal factor -external factor
internal factors-Production: production process, equipment used -Personnel: staff pattern,customers
internal factors-Finance: source -marketing: promotion, pricing
External factors effecting business-Political and legal factors: political parties can influence the business and new laws by the government. -Economic factor: the amount of income in an economy can change the demand of a prooduct.
External factors affecting business-social factors: attitiude and culture of people (education influences the business) -Technological factors: the advancement of technology will affect the business
How business make up an important part of the economy?-Provide goods and services -Provides job oppurtunites -Improves standard -genertaes more income to the nationeconomy if doing well
why do business fail-Lack of experience -Poor dealing with customers -Poor finance managment
Entrepreneuris someone who is willing to take a risk to start a new project or a new business.
Enterpiceskill needed to make a new idea or work
serial entrepreneurA Person who has an idea for new business and sets up many business
social entrepreneurthose entrepreneuer who do not have profit as there main objective
Qualities of entrepreneur- very hard working -willing to take risk -very quick thinking
why become an entrepreneur-will be your own boss -will control the business
why become an entrepreneur- can keep the profit - experience good feelings
why government likes entrepreneur- creating jobs for unemployed people -increasing earnings of country -pay taxes to the government
how can the government help entrepreneur-giving legal protection to new ideas - giving advice and useful information
entrepreneurial culture-entrepreneurs that are highly valued and respected in that country -environment encourages and helps them set new business
opportunity costwhen you decide one course of action you are sacrificing something else or another course of action.
resource scarcitylimited number or resources
choicesubstitutes (choose best choice)
tripple bottom line ( business performance should be measured in 3 positions)-Profit: reward of business -planet: impact on planet -People: treatment of people
businessan economic activity involving purchase, production and sale of goods and services undertaken with a motive of earning profit by satisfying human needs in society.
nature of business1.Business is an economic activity. 2. It includes production or procurement of goods and services. 3. It includes sale or exchange of goods and services with value.
nature of businessDealings in goods and services on a regular basis. Profit earning. Uncertainty of return. Element of risk.
Economic activities may be divided into three major categories-Business -Profession -Employment
professionit includes those activities which require special knowledge and skill in their occupation
examples of profession-doctors -lawyers
employmentit refers to the occupation in which people work for others and get remunerated in return.
business classification-industry -commerce
industryeconomic activities connected with conversion of raw-material into finished products.
commercetrade and aids to trade.
tradebuying and selling goods
aids to tradesupport services of trade
types of industriesprimary secondary tertiary
classification of tradeinternal trade external trade