Chapter 3 Practice

The advantage of a person becoming an entrepreneur is:

• more money'll always be earned than working for an employer
• there is more independence than when working for an employer 
• Less risk of business failure 
• no oppotunity cost involved in becoming anentepeneur

An important characteristic of a successful entrepreneur is that:

• they are always rich
• they are risk takers
• they are usually shy
• they want to avoid hard work

An important characteristic of a successful entrepreneur is that:

• they are always rich
• they are risk takers
• they are usually shy
• they want to avoid hard work

A business plan for a new business will include all of the following except

• financial forecasts
• market research data
• details of the business owners
• previous years' accounts

What benefit does drawing up a business plan bring for a new entrepreneur?

• it shows exactly how much money the firm will make
• it makes sure the bank will lend all the capital needed
• it means that the business start up has no risk of failure
• it helps in organising the resources needed for the new firm

Which of the following is not an effective way of measuring the size of a business?

• number of employees
• value of sales
• value of capital invested
• profit level

A good or service that is essential for living is called

• Want

• Needs

• Interest

• Desire

A good or service that people would like to have, but is not required for living is called

• Want

• Needs

• Interest

• Desire

Scarcity is the main economic problem. What is scarcity?

• It is a situation that exists when there are unlimited wants and limited resources to produce the goods and services to satisfy those wants

• the next best alternative forgone by choosing another item

• is the physical and mental efforts put in by the workers in the production process

• is the finance, machinery and equipment needed for the production of goods and services

Which of these is the best definition of the “Economic Problem”?

• People do not have enough money

• There are not enough resources to satisfy people’s wants

• There are too many items

• There are too many factors of production