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Enterprise
| Question | Answer |
|---|---|
| Define the factor of production 'Enterprise'? | Organises the other factors of production into a production unit to produce a good/ service. It undertakes the inherent risks in the hope of making a profit. |
| State the characteristics which make enterprise a unique factor of production? | It can earn a loss, returns can vary, return is residual. |
| Illustrate your understanding of the terms insurable risks? | Those risks which can be mathematically estimated and an entrepreneur can insure against occurring and an insurance policy can be purchased to provide compensation in the event of loss.e.g. theft of stock or cash, fire to premises/damage to stock. |
| Illustrate your understanding of the terms non-insurable risks? | Those risks which an entrepreneur cannot insure against occurring and an insurance policy cannot be purchased to provide compensation/ the entrepreneur suffers the entire loss. e.g. loss of profit, poor management decision making.,IR disputes. |
| State the economic reasons why entrepreneurship is important to the Irish economy? | Creates employment, orgainses production, what to produce/prices to charge,innovation, encourage further investment, outlet for savers funds, revenue for government, improve BOP, creates wealth. |
| State the means by which the Irish government could encourage entrepreneurship in Ireland? | Enterprise education, taxation policies, government policies/regulations, labour market policies, improved economic outlook/confidence, develop infrastructure, improve competitiveness, availability of bank credit, government initaitives |
| Do all entrepreneurs earn the dame level of profit? Explain your answer? | No. This is due to rent of abitiklty. Some are better than others and can earn a SNP or an economic rent. The enterpreneur cannot be replaced easily by another because of talent and business acumen possessed. If an enterpreneur works in a more competitive |
| State the role of profits in promoting development in a modern market economy? | Encourages risk taking, indicate the best use of resources/ consumer demand, encourage investment, provides funds for expansion, continuity of production, SNP reward innovation, source of revenue for the government, SNPs may promote mergers/takeovers. |
Created by:
deborahh
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