Question 1

Which of the following statements best describes the term competition?

Accepted Answer

When businesses attempt to attract the same customers

Answer

When businesses have only one supplier of raw materials

Answer

When businesses attempt to attract different customers

Answer

When businesses do not have any rivals

Question 2

Which of the following is an activity that a business could undertake to minimise risk?

Accepted Answer

Prepare a business plan

Answer

Sell its products in one market

Answer

Reduce spending on training

Answer

Reduce spending on consultants with specialist knowledge

Question 3

Which of the following ways might a technology firm, such as Apple, use to compete with its rivals?

Accepted Answer

Introduce new products

Answer

Increase prices

Answer

Reduce prices

Answer

Stop new product development

Question 4

Which of the following is a social cause of uncertainty for businesses?

Accepted Answer

Changes in tastes and fashion

Answer

Competitors cutting prices

Answer

Interest rate changes

Answer

Exchange rate changes

Question 5

In which of the following scenarios would a business face no competition?

Accepted Answer

When there is only one supplier of water to residents

Answer

When there are many telephone networks available to residents

Answer

When there are several electricity suppliers available to residents

Answer

When there are several suppliers of gas available to residents

Question 6

Which of the following best describes the term market? Where:

Accepted Answer

Buyers and sellers meet

Answer

Consumers and customers meet

Answer

Customers and buyers meet

Answer

Sellers and competitors meet

Question 7

Which of the following is a likely reason why a business may fail?

Accepted Answer

Overestimated sales

Answer

High quality levels

Answer

Start-up cost too low

Answer

Thorough market research

Question 8

Which of the following best describes the term risk?

Accepted Answer

The possibility that something might go wrong

Answer

When something is difficult to predict

Answer

A lack of information regarding a market

Answer

When something has already gone wrong

Question 9

Which of the following is a reward for an entrepreneur of running a business?

Accepted Answer

Making own decisions

Answer

Answer

Business failure

Answer

Shared control

Question 10

Uncertainty caused by a recession is classed as:

Accepted Answer

Economic uncertainty

Answer

Social uncertainty

Answer

Technological uncertainty

Answer

Political uncertainty

Question 11

A business has direct competition when:

Accepted Answer

Other businesses sell very similar products

Answer

Other businesses sell a different range of products at different prices

Answer

No other businesses sell the same products

Answer

Other businesses sell totally different products

Question 12

Which of the following is true of an entrepreneur?

Accepted Answer

Is willing to take risks when starting up a business

Answer

Is unlikely to be able to manage risk

Answer

Is likely to work for someone else

Answer

Is unwilling to take the risk of business failure

Question 13

Which of the following is a characteristic of a business that faces no direct competition and sells a product that is in high demand?

Accepted Answer

It will charge higher prices

Answer

It will charge lower prices than its competitors

Answer

It will promote itself extensively to attract customers

Answer

It will charge similar prices to its competitors

Question 14

Which of the following best describes the term uncertainty? When there is:

Accepted Answer

A lack of information and outcomes are hard to predict

Answer

Full information and outcomes are easy to predict

Answer

A chance something could go wrong and outcomes are easy to predict

Answer

A lack of information and outcomes are easy to predict

Question 15

Which of the following is an internal risk faced by businesses?

Accepted Answer

The business loses valuable employees to its competitors

Answer

A natural disaster occurs causing serious flooding

Answer

A new competitor enters the market

Answer

The Government passes a new law

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