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Questions and Answers
What is the primary benefit of increased competition in an industry?
What defines an entrepreneur?
Which of the following statements best describes needs and wants?
How does competition influence innovation?
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What is an example of a product becoming obsolete due to innovation?
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Which term describes products that are no longer used or produced because they are out of date?
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What is the most likely first expense to be cut following an unexpected pay-cut?
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What is the main reason businesses innovate their offerings?
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Study Notes
Competition
- Competition in a given industry benefits the consumer through increased choice and innovation
- Consumers gain purchasing power through higher levels of competition, which in turn influences pricing
Entrepreneurship
- Entrepreneurs are people who start their own businesses.
- Entrepreneurship is fueled by competition, as individuals aim to provide better goods or services than their rivals.
- Competition leads to innovation, which often renders older products obsolete
- Examples of obsolescence: Audio tapes → CDs → MP3s → Smartphone Streaming
Needs and Wants
- A need is something necessary for survival, such as food and shelter.
- A want is something that is not necessary for survival but adds pleasure or comfort to life.
- When faced with a reduction in income, individuals tend to cut back on "wants" first, such as travel or new car purchases.
- Fundamental needs, such as food and shelter, are typically the last to be cut.
- Businesses innovate to satisfy consumers' needs and wants.
- For example, CDs offered digital audio and the capability to skip tracks.
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Description
Explore the interconnections between competition, entrepreneurship, and consumer needs and wants in this quiz. Understand how competition impacts consumer choices and drives innovation, while also examining the differences between needs and wants.
