3.1.1 Why Businesses Exist

Why do people set up businesses mainly?

• To make a profit

• To provide luxury goods

• To avoid paying taxes

• To work fewer hours

What is a person who starts their own business called?

• Manager

• Employee

• Entrepreneur

• Investor

What is the main aim of most businesses?

• To make a profit

• To provide free services

• To employ as many people as possible

• To avoid competition

What is a characteristic of the public sector?

• Privately owned

• Government-owned

• Focused on profit

• Run by entrepreneurs

Which of the following is NOT an aim businesses might have besides making a profit?

• To offer the highest quality goods and services

• To give excellent customer service

• To avoid paying taxes

• To develop new products ahead of competitors

What is a key advantage of owning a business?

• Having a guaranteed income

• Being your own boss

• Avoiding all risks

• Receiving government subsidies

What happens if a business in the private sector doesn't make enough money to survive?

• It can go bankrupt and have to close down

• It receives government funding

• It merges with a public sector organization

• It continues to operate without changes

What is one of the social or ethical aims of non-profit businesses?

• To maximize profits

• To minimize environmental impact

• To compete aggressively

• To expand globally

What is one reason people might set up their own business?

• To avoid working

• To be their own boss

• To receive a fixed salary

• To avoid making decisions

What is an example of a luxury good or service?

• Electricity

• Books

• Jewellery

• Plumbing services