Taking Risks and Making Profits: Chapter 1 Quiz
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Questions and Answers

What does 'entrepreneur' mean?

  • A person who operates a non-profit organization
  • A person who risks time and money to start and manage a business (correct)
  • A person who invests in the stock market
  • A person who works as an employee in a business

    • Which of the following is an example of a service?

  • Clothing
  • Computers
  • Education (correct)
  • Food

    • What does 'goods' refer to?

  • Products related to the stock market
  • Products that cannot be held in your hand
  • Intangible products such as education and health care
  • Tangible products such as computers, food, and clothing (correct)

    • What was the initial investment made by Abdulmosen Alyahya and Saleh Alsaleh Kudu?

    <p>250,000 riyals</p> Signup and view all the answers

    What does 'revenue' refer to in a business context?

    <p>The total amount of money a business takes in during a given period</p> Signup and view all the answers

    What does 'profit' refer to in a business context?

    <p>The positive financial gain a business makes after deducting all expenses</p> Signup and view all the answers

    What is revenue?

    <p>The total amount of money a business takes in during a given period by selling goods and services</p> Signup and view all the answers

    What is profit?

    <p>The amount of money a business earns above and beyond what it spends for salaries and other expenses</p> Signup and view all the answers

    What is loss?

    <p>When a business’s expenses are more than its revenues</p> Signup and view all the answers

    What does the term 'risk' refer to in business?

    <p>The chance an entrepreneur takes of losing time and money on a business</p> Signup and view all the answers

    Which term refers to the general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure, and rewards?

    <p>Quality of life</p> Signup and view all the answers

    What does 'standard of living' refer to?

    <p>The amount of goods and services people can buy with the money they have</p> Signup and view all the answers

    What is the definition of 'outsourcing' in the context of business?

    <p>(Often in other countries) to do some of the functions of a firm, like production or accounting</p> Signup and view all the answers

    Who are stakeholders in the context of business?

    <p>All the people who stand to gain or lose by the policies and activities of a business</p> Signup and view all the answers

    In the context of business, what does 'outsourcing' refer to?

    <p>Contracting external parties to perform tasks or provide services that were traditionally performed internally</p> Signup and view all the answers

    What is the primary purpose of a business according to the provided text?

    <p>To provide goods and services to others while operating at a profit</p> Signup and view all the answers

    What is the definition of 'entrepreneur' in the context of business?

    <p>An individual who takes risks and starts and manages a business</p> Signup and view all the answers

    Which term refers to the general well-being of a society in terms of various factors like political freedom, education, and health care?

    <p>Standard of living</p> Signup and view all the answers

    What does 'risk' refer to in the context of business?

    <p>The uncertainty surrounding potential losses</p> Signup and view all the answers

    What does 'revenue' refer to in a business context?

    <p>The total amount of money a business takes in during a given period</p> Signup and view all the answers

    What is the primary distinction between revenue and profit in a business context?

    <p>Revenue is the total amount of money a business takes in by selling goods and services, whereas profit is the amount earned above total expenses.</p> Signup and view all the answers

    What risk did Geral Fauss face when he took 5,000 oversized foam fingers to the Sugar Bowl in New Orleans?

    <p>The risk of not being able to sell a single foam finger and incurring a significant financial loss.</p> Signup and view all the answers

    How does the concept of 'quality of life' differ from 'standard of living'?

    <p>Quality of life considers holistic well-being, including health, education, and leisure, while standard of living emphasizes income and consumption levels.</p> Signup and view all the answers

    What is the central challenge for businesses in responding to stakeholders?

    <p>Balancing the needs and concerns of different stakeholders to ensure equitable treatment.</p> Signup and view all the answers

    What role does outsourcing play in the context of business operations?

    <p>Outsourcing helps businesses streamline their operations and reduce costs by delegating certain functions to external companies.</p> Signup and view all the answers

    In the context of business, how are revenues and profits affected by high risks?

    <p>High risks may result in fluctuating revenues and unpredictable profits, impacting overall financial stability.</p> Signup and view all the answers

    How does the concept of 'stakeholders' relate to business operations?

    <p>Stakeholders play a critical role in shaping business strategies and influencing corporate governance decisions.</p> Signup and view all the answers

    What does 'revenue' signify in the context of business?

    <p>'Revenue' refers to the total monetary value obtained from selling goods or services during a specific period.</p> Signup and view all the answers

    Why is it crucial for businesses to understand the distinction between 'revenue' and 'profit'?

    <p>'Profit' signifies actual earnings available for reinvestment or distribution, while 'revenue' demonstrates overall income generation before expenses.</p> Signup and view all the answers

    What is a key implication of businesses engaging in outsourcing activities?

    <p>'Outsourcing' allows businesses to leverage specialized expertise and resources from external vendors, enhancing operational efficiency and cost-effectiveness.</p> Signup and view all the answers

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