Cambridge International AS and A Level Business

1 Enterprise
Multiple-choice questions
1 When a business ‘creates or adds value’ it increases:

a the difference between the cost of purchasing raw materials and the price the finished
goods are sold for

b the number of products it sells

c the difference between the cost of producing a product and the price for which it is sold

d the difference between the price of a product and the variable cost of its production

2 The machinery that is used by a business is an example of which factor of production?

a land

b capital

c labour

d enterprise

3 An entrepreneur is someone who:

a is an employee of a business enterprise

b takes the risk of starting and managing a business venture

c works for the government to provide public services

d just provides capital to a business start-up

4 Which one of the following is not a likely characteristic of a successful entrepreneur?

a willing to take risks

b committed and self-motivated

c innovative

d risk averse

5 The most likely difficulty for new business start-ups is:

a obtaining finance

b identifying a market

c marketing

d finding suitable employees

6 A dynamic business environment means:

a factors external to the business are never constant

b new employees are being recruited

c a business is constantly changing its products

d factors external to the business are easy to forecast

© Cambridge University Press 2014  Cambridge International AS and A Level Business Multiple-choice questions – Chapter 1 1
Cambridge International AS and A Level Business

 7 When an entrepreneur decides to spend $1,000 on a new computer to store details of

inventories, the opportunity cost is:

a $1,000

b everything else that could have been purchased with $1,000

c the next most needed factor that could have been bought

d the lost opportunity of buying a second-hand computer

 8 All of the following will help ensure that there is sufficient working capital for a
new business except:

a constructing a cash-flow forecast

b injecting sufficient capital at the beginning of a business venture

c developing a good working relationship with the bank

d offering generous credit terms to customers

 9 Business enterprise is claimed to bring all of the following benefits to an economy

with the exception of:

a creation of employment

b a more dynamic and innovative economy

c economic growth

d a reduction in competition

10 The most important difference between social enterprises and profit-seeking

businesses is:

a social enterprises never aim to make a profit

b social enterprises will have objectives other than profit

c profit-seeking businesses will always make a profit

d social enterprises do not sell goods and services but profit seeking businesses do

© Cambridge University Press 2014  Cambridge International AS and A Level Business Multiple-choice questions – Chapter 1 2