Entrepreneurship Basics
What is an employee?
A person who works for a business owned by someone else.
What is an economic system?
A method used by a society to allocate goods and services among its people and cope with scarcity.
What is demand?
The amount consumers are willing and able to buy.
What type of business makes products?
A manufacturing business.
What type of business is owned by one person?
A sole proprietorship.
What is an entrepreneur?
A person who creates and runs their own business.
What is scarcity?
When there are not enough goods and services to meet demand.
What is supply?
The amount producers are willing and able to sell.
What type of business sells goods directly to customers?
A retail business.
What type of business is owned by two or more people who agree to operate it together?
A partnership.
State one advantage of owning your own business.
Being your own boss or having the opportunity to earn profits.
Name the three types of economic systems.
Command economy, market economy, and mixed economy.
If demand increases while supply stays the same, what usually happens to price?
Price increases.
What type of business buys goods in large quantities and sells them to retailers?
A wholesale business.
A business owned by two or more people who share management and profits.
A corporation.
State one disadvantage of becoming an entrepreneur.
Possible answers: risk of business failure, financial insecurity, long hours and hard work, or unexpected problems.
Which economic system blends elements of the command economy and the market economy?
A mixed economy.
If more sellers begin selling the same product and demand stays the same, what usually happens to price?
Price decreases.
A mechanic repairs cars for customers. What type of business does the mechanic operate?
A service business.
What is the difference between limited liability and unlimited liability?
Limited liability generally limits an owner's financial responsibility, while unlimited liability can make an owner personally responsible for all business debts.
What is the difference between a characteristic and a skill?
A characteristic is a quality or trait that describes a person. A skill is an ability learned through training and practice.
In which economic system does the government control the production, allocation, and prices of goods and services?
A command economy.
A popular phone sells out because many people want it, but only a few are available. Explain what happens to its price and why.
Its price may increase because demand is high compared with supply.
Put these roles in the correct order: retailer, consumer, manufacturer, wholesaler.
Manufacturing, wholesaling, and retailing, consumer
A group of farmers jointly owns a business that helps them sell their produce and benefits all members. What type of business ownership is this?
A cooperative.