EBM N4 November 2022 | Paper 1

Entrepreneurship and Business Management N4

EBM N4 November 2022 | Paper 1

Question 1.1

Give ONE word for each of the following descriptions.

1.1.1 The creativity method that gives you a picture of groups of ideas that you can examine more closely without losing your central idea.

Mind map
A mind map shows one central idea with related ideas branching out from it. This helps you organise and examine groups of ideas without losing the main focus.

1.1.2 The point at which the total expenditure of the business is equal to the total income.

Break even
Break-even is the stage where the business makes neither a profit nor a loss because total costs and total income are equal.

1.1.3 Expenses that stay the same month after month.

Fixed cost
Fixed costs remain the same over a period and do not change with the level of production or sales in the short term.

1.1.4 The financial statement that summarises the revenues and the expenses generated by the business.

Income statement
An income statement summarises income and expenses and helps show whether the business made a profit or loss.

1.1.5 Products are purchased only after customers have compared a variety of similar and competitive products.

Shopping products
Shopping products are bought after comparing price, quality, style, or features with similar products.

1.1.6 The pictures of famous personalities are printed on the packaging.

Kaleidoscope packaging
This type of packaging uses attractive visual appeal, including famous people, to create interest and demand for the product.

1.1.7 The most common instrument for collecting primary data.

Survey
A survey is commonly used to collect primary data directly from people. It helps businesses gather opinions, needs, and market information.

Question 1.2

Indicate whether the following statements are TRUE or FALSE. .

1.2.1 Economic factors can influence your sales scenarios.

True
Economic conditions such as inflation, unemployment, and customer spending power can affect sales and therefore influence sales scenarios.

1.2.2 A private company has unlimited liabilities.

False
A private company does not have unlimited liability in the ordinary sense used for sole traders or some partnerships. The statement is therefore incorrect.

1.2.3 A slogan is a clever phrase or sentence that says something good about a product, service or a business.

True
A slogan is meant to be memorable and positive, helping to promote a product, service, or business.

1.2.4 At the end of the lease period, you return the equipment back to the company that leased it to you.

True
Leasing gives the business the use of equipment for a period, and when that period ends the equipment is returned to the leasing company.

1.2.5 The idea with the odd pricing technique is to gain quick acceptance in the market.

False
Odd pricing is used to make a price look psychologically lower, such as 99.99. Quick market acceptance is linked more closely to penetration pricing.

1.2.6 The remuneration policy is a component of marketing.

False
Remuneration policy relates to payment of employees, not to the marketing function.

1.2.7 Attribute analysis is an example of creativity method.

True
Attribute analysis is a creativity method because it examines the features or attributes of a product or idea in order to improve or change it.

1.2.8 The idea with the skimming pricing technique is to gain quick acceptance in the market.

False
Skimming pricing starts with a high price to recover costs or target less price-sensitive buyers first. Quick acceptance in the market is not the main purpose of skimming.

1.2.9 The Department of Trade and Industry is a source of information when compiling a business plan.

True
Government departments can provide useful business information, regulations, and support material that help when compiling a business plan.

1.2.10 A bank overdraft is the most popular type of long-term financing.

False
A bank overdraft is a short-term source of finance used to cover temporary cash shortages, not long-term financing.

Question 2.1

Why are entrepreneurs important in our economy? Give FOUR reasons. (8)

They develop natural resources.
Entrepreneurs help turn natural resources into useful goods or economic activity, which supports growth and production.

They create job opportunities.
Entrepreneurs start businesses and employ people, which helps reduce unemployment.

They pay tax.
Businesses contribute to government revenue through taxes, which supports public services and development.

The free market system depends on entrepreneurs.
Entrepreneurs drive production, innovation, and competition, all of which are important to a functioning free market economy.

Question 2.2

What is an entrepreneur? Define the term. (4)

Someone who creates a new business in the face of risk with the aim of making profit. He or she identifies business opportunities and assembles the necessary resources to capitalise on those opportunities.

Question 2.3

Name TWO types of medium-term financing. (4)

Equity
Equity is finance that comes from ownership contribution rather than borrowing.

Debt
Debt is borrowed finance that must be repaid over time.