Post-Assessment -Gr 9 W7

Which of the following is the most likely reason for owners wishing to expand their businesses?

• To keep control of the business

• To make higher profits

• To encourage competition

• To avoid publicity

Which of the following is an example of horizontal integration between two businesses?

• An oil company and an insurance company merge

• A shoe shop buys out the factory making shoes

• A steel firm takes over a coal mine that supplies coal

• Coca-Cola takes over a small soft drink business

One of the most common reasons for new business start-ups not surviving is:

• too much time spent on developing the business plan

• no competitors in the industry

• no financial planning leading to lack of cash

• consumers prefer to deal with small scale businesses offering a personal service

If the risks of starting up a business are so high, why do entrepreneurs create new businesses?

• The rewards are not greater than the opportunity cost

• The rewards can be very high

• The risks of a new business can be eliminated if the entrepreneur is lucky

• There is much greater job security than when working for a large employer

One way of overcoming the problems that often result from rapid business growth is to:

• integrate with a much larger business

• reduce the amount of capital invested in the business

• reduce communications between people in the business as they are all so busy

• operate the business in smaller units