1.1.3 The role of business enterprise

What is the main purpose of a business?

• To avoid competition

• To maximise employee wages

• To produce goods or services

• To reduce taxes

Which of the following is an example of a service?

• Smartphone

• Haircut

• Laptop

• Bicycle

What does a business do when it meets customer needs?

• Provides what customers want

• Increases competitors’ profits

• Raises its own prices

• Avoids market research

Which of the following is a characteristic of an entrepreneur?

• Follows instructions

• Takes risks

• Avoids decisions

• Hires employees only

Which of these best defines ‘goods’?

• Tangible items sold by businesses

• Services like consulting

• Intangible benefits

• Digital downloads

A unique selling point (USP) helps a business to:

• Stand out from competitors

• Pay less tax

• Copy another product

• Avoid promotion

Which of these is an example of adding value?

• Increasing employee hours

• Lowering the product price

• Improving product design

• Reducing packaging

What is meant by ‘convenience’ as a way of adding value?

• High cost location

• Making the product easy to use or find

• Making the product complicated

• Adding extra packaging

Which of the following adds value through branding?

• Reducing the price

• Removing logos

• Creating a strong brand image

• Hiding company name

Why do entrepreneurs take risks?

• To avoid tax

• To follow instructions

• To potentially gain rewards

• To become employees