Unit 1.

1 Comprehension Questions

The role of businesses in combining human, physical and financial

resources to create goods and services (AO2)

1. What is a ‘business’?
2. What are goods? Give 3 examples.
3. What are services? Give 3 examples.
4. Why do businesses exist?
5. What are factors of production?
6. Who are customers?
7. What is meant by adding value? Give an example of this

The main business functions and their roles (AO2)

1. What are the four main functional areas of a business?

2. What is meant by human resources (HR)?
3. Provide three examples of functions carried out by the HR department of an organization
4. What is the main purpose (function) of the finance department of an organization?
5. Provide three examples of functions carried out by the finance department of a business.
6. What is marketing all about?
7. Provide three examples of activities carried out by the marketing department of a
business.
8. What is meant by operations management?
9. Provide three examples of functions carried out by the operations management
department of an organization.
10. Provide an example to explain why the four functional areas of any organization are said
to be interdependent

Primary, secondary, tertiary and quaternary sectors (AO2), and the nature
of business activity in each sector and the impact of sectoral change on
business activity (AO2)

1. What is the primary sector (primary industry)?

2. Give three examples of business activity in the primary sector of the economy.
3. What is the secondary sector (secondary industry)?
4. Give three examples of business activity in the secondary sector of the economy.
 5. What is the tertiary sector (tertiary industry)?
6. Give three examples of business activity in the tertiary sector of the economy.
7. Give three examples of business activity in the secondary sector of the economy.
8. What is the quaternary sector (tertiary industry)?
9. Give three examples of business activity in the quaternary sector of the economy.
10. Why is the value added in the primary sector relatively low compared to that in the
secondary and tertiary sector?
11. Which of the four sectors is the most predominant sector in economically developing
countries?
12. Which of the four sectors is the most predominant sector in economically developed
(high-income) countries?

The role of entrepreneurship and intrapreneurship in overall business

activity (AO3)

1. What is meant by entrepreneurship?

2. Give three examples of common sought-after characteristics and skills of a successful
entrepreneur.
3. Provide three example of famous (well-known) entrepreneurs. Note: these can form the
basis of research for your CUEGIS essays.
4. Why is the success of a country largely dependent on its entrepreneurial spirit?
5. What is meant by intrapreneurship?
6. How does an entrepreneur differ from an intrapreneur?

Reasons for starting up a business or an enterprise (AO2)

1. Give three reasons why people start up their own business or enterprise.
2. In the context of business management, what is meant by autonomy?

Common steps in the process of starting up a business or an enterprise (AO2)

1. What are the common or typical steps in starting up a business?

2. Why is it important for entrepreneurs to consider market research?
3. Why is it important for new firms to have a thorough business plan?
4. Why is the business location decision an important one?
 5. Why is it important for entrepreneurs to consider legal requirements when setting up
their business?
Problems that a new business or enterprise may face (AO2)

1. What are the main problems that new businesses may encounter?
2. Why is an effective marketing strategy important for new businesses?
3. Why do entrepreneurs often have to work very long hours, especially when setting up a
new business?
4. Why might some entrepreneurs lack important skills for success?
The elements of a business plan (AO2)

1. What is a business plan?

2. What is the main purpose of a business plan?
3. Why is it important for businesses, especially small ones, to have an effective, well-
thought out business plan?
4. What are the main elements of a typical business plan?

Distinction between the private and the public sectors (AO2)

1. What is the private sector of the economy?

2. Provide three examples of businesses operating in the private sector.
3. What is the public sector of the economy?
4. Provide three examples of businesses operating in the public sector.
The main features of the following types of for-profit (commercial) organizations
(AO3)

1. What is a sole trader?

2. What is meant by unlimited liability?
3. Give three advantages of sole traders.
4. Give three disadvantages of sole traders.
5. What are partnerships?
6. What is an ordinary partnership?
7. What is a Deed of Partnership?
8. What are silent partners?
9. Give two advantages of partnerships.
10. Give two disadvantages of partnerships.
11. What are companies (corporations)?
12. What is meant by limited liability?
13. What is the difference between private limited companies and public limited companies?
 14. What is a joint-stock company?
15. Who are shareholders?
16. What are the main features of private limited companies?
17. What are the main features of public limited companies?
18. What is a stock exchange (or stock market)?
19. What is an initial public offer (IPO)?
20. Why are limited liability companies required to publish their final accounts each year?
21. What are three advantages of private limited companies?
22. What are three disadvantages of private limited companies?
23. What are two advantages of public limited companies?
24. What are two disadvantages of public limited companies?
Types of for-profit social enterprises (AO3)

1. What is a for-profit social enterprise?

2. What are the three main types of for-profit social enterprises?
3. What are cooperatives?
4. What are the main features of cooperatives?
5. Give three advantages of cooperatives.
6. Give three disadvantages of cooperatives.
7. What are microfinance providers?
8. How have microfinance providers helped female entrepreneurs in low-income countries?
9. Give two advantages of microfinance providers.
10. Give two disadvantages of microfinance providers.
11. What are public-private partnerships (PPP)?
12. Give three advantages of public-private partnerships.
13. Give three disadvantages of public-private partnerships.
Types of non-profit social enterprises (AO3)

1. What are non-profit social enterprises?

2. Give two advantages of non-profit social enterprises.
3. Give two disadvantages of non-profit social enterprises.
4. What are the two main types of non-profit social enterprises?
5. What is are non-governmental organizations (NGOs)?
6. How are NGOs usually funded?
7. What are charities?
8. What are the main sources of finance for charities?