Chapter 1

A startup coffee shop designs its business to operate entirely online, offering home delivery subscriptions for freshly roasted beans. What aspect of its operation defines its business model?

• The type of coffee beans it uses

• The method it uses to generate revenue through subscriptions

• The marketing campaigns it runs on social media

• The location of its roasting facility

A new airline wants to enter the industry but faces high costs for airplanes, government licenses, and fuel agreements. These obstacles are examples of what concept?

• Competitive advantage

• Barriers to entry

• Stakeholder interests

• Revenue models

A community food bank runs programs to provide meals to families in need and reinvests any surplus funds into expanding services. What type of organization is this?

• For-profit business

• Not-for-profit organization

• Public corporation

• Private limited company

Which of the following businesses is classified as a goods-producing business?

• A gym that offers personal training sessions

• A bakery that sells freshly baked bread

• A law firm providing legal advice

• A hair salon offering haircuts

A technology company patents a new AI software that no competitors can legally copy for 10 years. What does this situation provide the company?

• Opportunity cost

• Competitive advantage

• Barrier to entry

• Stakeholder confidence

A factory pollutes a local river, impacting residents and local farmers. Who among the following is considered a stakeholder?

• Only the factory owners

• Local residents, farmers, and factory employees

• Only the government regulatory agency

• Only the factory’s shareholders

A company decides to spend €100,000 on advertising rather than upgrading its production machinery. What is the opportunity cost of this decision?

• The immediate profit generated from advertising

• The potential increase in production efficiency from new machinery

• The cost of the advertisements

• The savings achieved by not upgrading equipment

An insurance company notices that clients with comprehensive car insurance are more likely to take risks when driving. What concept does this represent?

• Competitive advantage

• Moral hazard

• Stakeholder behavior

• Opportunity cost

Which company department is primarily responsible for managing employee payroll and recruitment?

• Marketing

• Human Resources

• Operations

• Finance

A clothing store sells €50,000 worth of merchandise in a month. What is this amount called in accounting terms?

• Profit

• Revenue

• Net income

• Cash flow