Questions and Answers
What is one purpose of business?
What are the sectors in industry?
Entrepreneurship involves accepting risks to provide products and services.
True
What is human capital?
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Which of the following describes a command economy?
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Which countries are closest to command economies?
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What is a mixed economy?
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What is true about sole proprietorship?
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What does economic systems describe?
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Study Notes
Purpose of Business
- Fulfills consumers' wants and needs.
- Ergonomic empowerment enhances user experiences.
- Tangible products: physical items that can be seen and touched.
- Intangible products: services that cannot be touched but satisfy needs.
- Maslow's hierarchy of needs outlines levels: physiological, safety, belongingness, esteem, self-actualization, cognitive, aesthetic, and transcendence.
Business and Society Interdependence
- Businesses and society influence each other significantly.
- Addressing the economic problem involves satisfying wants and needs with limited resources.
Factors of Production
- Agriculture: Utilizes natural resources that cannot be increased or reproduced.
- Labour: Engages human resources with varied skill levels; unskilled labour in high supply amid a skilled labour shortage. Influenced by population dynamics and education.
- Capital: Represents money and assets used for production; involves long-term assets that generate interest. Includes "Human Capital," which refers to skill, knowledge, and experience.
- Entrepreneurship: Coordinating production factors and accepting risks to provide goods/services.
Industry Sectors
- Primary sector: Harvests natural resources, focusing on raw and unprocessed materials.
- Secondary sector: Involves manufacturing and processing raw materials.
- Tertiary sector: Centers on services and product distribution.
Types of Organisations
- Private/business organisations: Operate to generate profit.
- Government organisations: Exist at national, provincial, and local levels.
- Non-profit organisations: Aim to fulfill specific social missions without profit motives.
Business Management Functions
- Planning: Establishes objectives and directions at the outset.
- Organising: Aligns resources to achieve set goals; organizes tasks.
- Leading: Involves motivating and inspiring staff towards common goals.
- Controlling: Ensures goals are met and evaluates performance.
Economic Systems Overview
- Defined methods for societies/governments to distribute resources, goods, and services.
- Market economy: Based on private business operation, supply/demand dynamics, and limited government interference; promotes competition and innovation.
- Command economy: Controlled by the government, with state ownership of resources; limited consumer choices and regulated prices.
- Mixed economies: Combine elements of market and command economies, with shared control over industries and resources.
Economic Systems in Practice
- Market economy (Capitalism): Involves private initiatives with minimal government involvement. Examples include the US, Hong Kong, and Singapore.
- Command economy (Communism): Features state control over production and limited property ownership, seen in China and North Korea.
- Mixed economies (Socialism): Balance government control in key sectors while permitting private enterprise; exemplified by South Africa and China's dual approach.
Business Ownership Types
- Sole proprietorship: Owned by one individual, characterized by simplicity and lower complexity.
- Partnership: Business owned by two or more individuals who share responsibilities.
- Company: A formal business structure with shareholders and structured governance.
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Description
Explore the foundational concepts of business from the first lecture of Term 1. This quiz covers the purposes of business, the distinction between tangible and intangible products, and Maslow's hierarchy of needs. Test your understanding of how businesses fulfill wants and needs.
