BUSINESS EXAM STLYE

QUESTIONS
1) C
2) B
3) A
4) D
5) A
6) B
7) A
8) D
9) A
10) C
SHORT RESPONSE
1) The main function of a business is to produce products, which
satisfy consumer wants and sell them in a market, where consumers
and businesses meet, for a profit
?b) A business requirement of employees depends on its scale of
production and the product it produces. It is a major source of
Australias employment and consumer need to money from him to
purchase products
?c) Businesses provide their employees with income, which allows
them to purchase goods and services, which they need. A business
provides a wage or a salary to its employees, dividends to its share
holders and profit to the owner
?d) As a business produces more range of products or creates new
products, through either innovation or invention, it increases the
amount of choices a consumer has.
2) An entrepreneur is a person who risk their time and money, use
an unique idea to establish and operate a business, in hope of
making a profit
b)
3a) Number of employees, number of owners
Who makes the decision & who provides the finance
b) A small business has up to 19 employees while a large business
has more than 200 employees

A small business has one or two owners while a large business sells
its shares on the ASX, hence 1000s of share holders = 1000s of
owners
A small business is either a sole trader or a partnership while a large
company is most likely to be a public company
In a small business, the owner makes most, if not all, the
management and operation decisions while a large business has
multiple levels of managements and also subsection at each level to
delegate authority, hence multiple people are responsible for
making the decisions
In a small business, the owner provides the finance from their
saving or personal loan while large business finance is from selling
its shares
c)
4a) Sole Trader:
-Get to make all the decisions
-Get to keep all the profits
-Heavy workload
-Difficulty in raising capital
ii) Share the workload between partners
-Get to pick your partners
-Disputes between partners
-unlimited liability
iii) Easy to raise capital
-Limited liability
-Reduced efficiency
-Loss of control
b) Incorporated becomes a separate legal entity from its owners
and also gain perpetual succession and limited liability, for private
and public companies
Unincorporated Either sole trader or partnership, has unlimited
liability
5a) Refers to the internal factors, factors which the business has
control over, and also external factors, factors over which the
business has no or limited control