A Level Business Quiz Questions And Answers
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Are you planning to start a new business or grow up the existing one? You can take this A Level Business quiz and see what your understanding of running a business is. We have prepared a set of questions for you that will help you check your knowledge about business, whether it is a local business or any multinational organization. If you miss out on something, you can also learn. Go for it, and try for a perfect score on the quiz. All the best!
- 1.
What is the primary purpose of a SWOT analysis in business strategy?
- A.
Identifying market trends
- B.
Evaluating financial performance
- C.
Assessing internal and external factors
- D.
Setting pricing strategies
Correct Answer
C. Assessing internal and external factorsExplanation
A SWOT analysis in business strategy serves the purpose of assessing internal Strengths and Weaknesses, as well as external Opportunities and Threats. This comprehensive evaluation helps businesses make informed decisions by understanding their internal capabilities and limitations, as well as recognizing external factors that may impact their performance and competitiveness.Rate this question:
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- 2.
VAT is a tax on:
- A.
Sales
- B.
Income
- C.
Profit
- D.
Property
Correct Answer
A. SalesExplanation
VAT, or Value Added Tax, is a type of tax that is imposed on the sale of goods and services. It is levied at each stage of production and distribution, based on the value added to the product at that stage. Therefore, the correct answer is sales, as VAT is specifically applied to the sales of goods and services.Rate this question:
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- 3.
What term describes the degree to which a product can satisfy a customer's wants and needs?
Correct Answer
Utility, utilityExplanation
Utility in business refers to the value or satisfaction a consumer receives from the consumption of a good or service. It is a measure of the product's ability to meet the customer's desires and needs. High utility often translates into greater demand for a product. The concept is central in economics and marketing when assessing product development and consumer behavior.Rate this question:
- 4.
Over the last 50 years, economic growth in the UK has averaged...
- A.
25% each year
- B.
2% each year
- C.
1% each year
- D.
2.5% each year
Correct Answer
D. 2.5% each yearExplanation
Over the last 50 years, economic growth in the UK has averaged 2.5% each year. This means that, on average, the UK's economy has been growing at a rate of 2.5% annually over the past five decades. This indicates a relatively steady and consistent growth rate for the UK's economy, which is considered healthy and positive.Rate this question:
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- 5.
How are interest rates set in the UK?
- A.
They are decided by the MPC.
- B.
They are decided by the EU Banking Committee.
- C.
They are decided by the UK Government.
- D.
They are decided by the Governor of the Bank of England.
- E.
They are decided by the international market rate.
Correct Answer
A. They are decided by the MPC.Explanation
The correct answer is that interest rates in the UK are decided by the MPC (Monetary Policy Committee). The MPC is a committee within the Bank of England that is responsible for setting the official interest rate in order to achieve the government's inflation target. The committee is made up of nine members, including the Governor of the Bank of England, and they meet regularly to assess economic conditions and make decisions on interest rates.Rate this question:
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- 6.
Which of these is NOT paid to HMR&C by a private limited company?
- A.
Income tax (PAYE)
- B.
VAT
- C.
NIC (employer contribution)
- D.
Corporation tax
Correct Answer
A. Income tax (PAYE)Explanation
Although collected by the business, employees pay Income TaxRate this question:
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- 7.
Limited liability means_________.
- A.
Loss cannot exceed the value of total assets.
- B.
Every shareholder has to help to pay off any debts.
- C.
You only have to pay back what you can afford.
- D.
Only the Board members have a personal liability.
Correct Answer
A. Loss cannot exceed the value of total assets.Explanation
Limited liability means that the liability of the shareholders or owners of a company is limited to the amount of their investment in the company. In other words, if the company incurs losses or debts, the shareholders are not personally responsible for those debts beyond the value of their investment. This provides protection to the shareholders and ensures that their personal assets are not at risk if the company faces financial difficulties.Rate this question:
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- 8.
A small business often has to use which pricing strategy when entering a new market?
Correct Answer
price following, Penetration pricing, price followerExplanation
When small businesses enter a new market, they commonly use penetration pricing as a strategic approach. This strategy involves setting a low price to attract customers away from established competitors. The goal is to generate a large volume of sales quickly, increase market share, and establish a strong presence in the market. This approach can be particularly effective for a small business looking to carve out a niche against more established brands.Rate this question:
- 9.
Which of these is NOT a result of customer satisfaction?
- A.
Word of mouth recommendation
- B.
Repeat business
- C.
Improving product design
- D.
Repeat purchases
Correct Answer
C. Improving product designExplanation
Improving product design is not a result of customer satisfaction. Customer satisfaction is typically measured by factors such as word of mouth recommendation, repeat business, and repeat purchases. These indicate that customers are happy with the product or service and are likely to recommend it to others or make repeat purchases. However, improving product design is a proactive step taken by the company to enhance the quality and features of the product, which may or may not directly result from customer satisfaction.Rate this question:
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- 10.
Which TWO of these would be considered PLACE in the marketing mix? (select that apply)
- A.
A point-of-sale display
- B.
Free gift
- C.
Home delivery service
- D.
A new design
- E.
Charging the same as a competitor
Correct Answer(s)
A. A point-of-sale display
C. Home delivery serviceExplanation
A point-of-sale display and home delivery service can be considered as "place" in the marketing mix. Place refers to the distribution channels and methods used to make the product or service available to the target customers. A point-of-sale display is a physical location where the product is displayed and sold, while home delivery service is a method of delivering the product directly to the customer's doorstep. Both of these options focus on the physical availability and convenience of the product, making them relevant to the "place" element of the marketing mix.Rate this question:
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- 11.
Starting a business that fails probably means that.
- A.
Starting another business would be too risky.
- B.
Starting another business is more likely to succeed.
- C.
Everybody loses a lot of money.
- D.
The market research wasn't very good.
Correct Answer
B. Starting another business is more likely to succeed.Explanation
The correct answer suggests that starting another business is more likely to succeed. This implies that the failure of the first business may have provided valuable lessons and experience, increasing the chances of success in the next venture. It also implies that failure does not necessarily deter individuals from pursuing their entrepreneurial aspirations, but rather motivates them to learn from their mistakes and try again with a better understanding of the market and potential risks.Rate this question:
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- 12.
Innovation is BEST described as.
- A.
Coming up with a completely new idea
- B.
Making an invention suitable for mass production
- C.
Doing something cheaper or better
- D.
Holding the patent of something new
Correct Answer
B. Making an invention suitable for mass productionExplanation
Innovation is best described as making an invention suitable for mass production because it refers to the process of taking a new idea or invention and developing it in a way that allows it to be produced and distributed on a large scale. This involves refining and adapting the invention to meet the requirements of mass production, such as ensuring cost-effectiveness, scalability, and efficiency. By making an invention suitable for mass production, innovation enables widespread access and adoption of new technologies, products, or services.Rate this question:
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- 13.
A new band would protect its songs by.
- A.
Hiring lawyers
- B.
Warning competitors not to copy them
- C.
Keeping records to show they had written the songs
- D.
Obtaining a patent
Correct Answer
C. Keeping records to show they had written the songsExplanation
A new band would protect its songs by keeping records to show they had written the songs. This is because maintaining a record of the creation of the songs provides evidence of their originality and ownership. In case of any copyright disputes or claims of plagiarism, these records can be used to prove that the band is the rightful creator of the songs. Hiring lawyers and obtaining a patent might be options for legal protection, but keeping records is a fundamental step in establishing ownership and protecting intellectual property rights. Warning competitors not to copy them is a proactive measure, but it may not hold legal weight without proper documentation.Rate this question:
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- 14.
Thinking about an entrepreneur, which is never true.
- A.
They are prepared to take a risk.
- B.
They always prefer to offer services, rather than a good.
- C.
They want to run their own business.
- D.
They show initiative. They enjoy making things happen, rather than just waiting.
Correct Answer
B. They always prefer to offer services, rather than a good.Explanation
Entrepreneurs do not always prefer to offer services rather than goods. Many entrepreneurs start businesses that involve the production and sale of physical goods. They may see a market opportunity for a new product or have a passion for creating and selling tangible items. Offering services is just one option for entrepreneurs, but it is not a characteristic that applies to all of them.Rate this question:
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- 15.
WHOLESALER is another term for.
- A.
A competitor
- B.
A supplier
- C.
A group of businesses
- D.
A manufacturer
Correct Answer
B. A supplierExplanation
A wholesaler is another term for a supplier because a wholesaler is a business that buys products in bulk from manufacturers and sells them to retailers or other businesses. Wholesalers act as intermediaries between manufacturers and retailers, providing a steady supply of products to meet the demands of retailers. They often offer discounted prices and bulk purchasing options to retailers, making them an essential part of the supply chain. Therefore, a wholesaler can be considered as a supplier of goods to retailers or other businesses.Rate this question:
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- 16.
A source of added value can be.
- A.
USP
- B.
Formula
- C.
Price
- D.
Poor service
Correct Answer(s)
A. USP
B. FormulaExplanation
The correct answer is USP and Formula. A unique selling proposition (USP) is a factor that sets a product or service apart from its competitors and makes it more appealing to customers. It is a source of added value because it highlights the unique features or benefits that a product offers. Additionally, the formula of a product can also be a source of added value. If a product has a unique or innovative formula, it can provide superior performance or results compared to other similar products, making it more valuable to customers.Rate this question:
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- 17.
Hiring somebody to count the number of people who enter a competitor's shop on a specific day is called 'observation' and would be considered secondary market research.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
This is observation, but as it is being done for the first time, specifically for you, it is PRIMARY market research.Rate this question:
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- 18.
Hiring somebody to count the number of people who enter a competitor's shop on a specific day is called 'observation' and would be considered secondary market research.
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
This is observation, but as it is being done for the first time, specifically for you, it is PRIMARY market research.Rate this question:
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- 19.
What is the primary purpose of conducting a SWOT analysis in strategic business planning?
- A.
To evaluate the financial performance of a company over time
- B.
To identify the internal strengths and weaknesses, and external opportunities and threats to the business
- C.
To measure the liquidity, solvency, and profitability of a business
- D.
To analyze the demographic characteristics of potential customers
Correct Answer
B. To identify the internal strengths and weaknesses, and external opportunities and threats to the businessExplanation
A SWOT analysis is a strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning. This method helps organizations in assessing both internal and external factors that could impact their objectives. Strengths and weaknesses are internal factors, which might include resources, assets, processes, and people. On the other hand, opportunities and threats are external factors, which encompass market trends, economic conditions, funding changes, and other external risks.Rate this question:
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- 20.
Which of the following is NOT an advantage of cell production?
- A.
Better communication
- B.
Multi-skilling
- C.
Low cost of training
- D.
Improved job satisfaction
Correct Answer
C. Low cost of trainingExplanation
As cell members have to learn more tasks, they need more training.Rate this question:
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- 21.
Inspecting finished products at the end of a production line is known as
- A.
Quality management
- B.
Quality assurance
- C.
Quality control
- D.
Quality inspection
Correct Answer
C. Quality controlExplanation
Quality control refers to the process of inspecting finished products at the end of a production line. It involves checking the products for defects or deviations from the desired specifications to ensure that they meet the required quality standards. This process helps in identifying and rectifying any issues or discrepancies before the products are delivered to the customers. Quality control plays a crucial role in ensuring that the final products are of high quality and meet the expectations of the customers.Rate this question:
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- 22.
When quality is inspected at every stage of production, this is known as.
- A.
Quality control
- B.
Continuous improvement ('Kaizen')
- C.
Quality management
- D.
Quality assurance
Correct Answer
D. Quality assuranceExplanation
This is often part of a Total Quality Management (TQM) environment.Rate this question:
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- 23.
Job production is usually associated with.
- A.
High volume, low-value products
- B.
Catering
- C.
Low volume, expensive products
- D.
Car manufacturing
Correct Answer
C. Low volume, expensive productsExplanation
Job production is usually associated with low volume, expensive products. This means that the production process is tailored to meet the specific requirements of each individual product, rather than mass producing standardized items. This approach is commonly used for products that are unique, customized, or require a high level of craftsmanship. Examples of industries that typically use job production include high-end furniture manufacturing, custom jewelry making, and bespoke clothing production.Rate this question:
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- 24.
In the context of human resource management, what does the term "glass ceiling" refer to?
- A.
A transparent earnings statement that provides full disclosure of a company's pay practices
- B.
A metaphorical barrier that prevents certain demographics, particularly women and minorities, from rising beyond a certain level in a corporate hierarchy
- C.
The physical design of modern corporate offices featuring glass structures, intended to create a perception of openness and equality
- D.
A government-imposed limit on the amount of greenhouse gases a company can emit
Correct Answer
B. A metaphorical barrier that prevents certain demographics, particularly women and minorities, from rising beyond a certain level in a corporate hierarchyExplanation
The term "glass ceiling" refers to an invisible barrier that prevents certain groups, especially women and minorities, from ascending through the ranks of an organization, irrespective of their qualifications or achievements. This term symbolizes the subtle, often invisible institutional restrictions that curtail opportunities for advancements in corporate and other hierarchical structures.Rate this question:
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- 25.
Which statement is never true for a factory using quality assurance?
- A.
Quality is the responsibility of a special team.
- B.
Quality is something everybody helps improve.
- C.
Standards such as ISO9001 are used.
- D.
Quality can be measured regularly as part of TQM.
Correct Answer
A. Quality is the responsibility of a special team.Explanation
In a factory using quality assurance, it is never true that quality is the responsibility of a special team. Quality is something that everybody helps improve, as it is a collective effort. Standards such as ISO9001 are used to ensure quality, and quality can be measured regularly as part of Total Quality Management (TQM).Rate this question:
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- 26.
Which of these production methods usually needs the most training but provides the best motivation for workers?
- A.
Cell production
- B.
Batch production
- C.
Flow production
- D.
Job production
Correct Answer
D. Job productionExplanation
Job production usually needs the most training but provides the best motivation for workers. In job production, workers are responsible for producing a complete product from start to finish, which requires specialized skills and knowledge. This type of production method often involves customized or unique products, which means that workers need extensive training to handle different specifications and requirements. However, the autonomy and ownership of the entire production process can be highly motivating for workers, as they have a sense of pride and accomplishment in creating a finished product.Rate this question:
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- 27.
When the quality of production is measured on a regular basis, this is known as.
- A.
Total Quality Management (TQM)
- B.
Quality assurance
- C.
Kaizen
- D.
ISO 9001
Correct Answer
A. Total Quality Management (TQM)Explanation
Total Quality Management (TQM) is the correct answer because it refers to a management approach that focuses on continuously improving the quality of products or services. TQM involves the participation of all employees in the organization and the use of various tools and techniques to measure and improve quality. By measuring the quality of production on a regular basis, TQM ensures that any issues or defects are identified and addressed promptly, leading to improved overall quality and customer satisfaction.Rate this question:
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- 28.
The PDCA cycle is.
- A.
Plan, Do, Change, Act
- B.
Plan, Do, Check, Adjust
- C.
Produce, Do, Check, Act
- D.
Plan, Do, Check, Act
Correct Answer
D. Plan, Do, Check, ActExplanation
The correct answer is Plan, Do, Check, Act. The PDCA cycle, also known as the Deming cycle or the Shewhart cycle, is a continuous improvement model used in various industries. It starts with planning, where objectives and processes are established. Then, actions are taken to implement the plan. Next, the results are checked and compared to the objectives. Finally, adjustments are made based on the findings to improve future performance. This cycle promotes a systematic approach to problem-solving and encourages continuous learning and improvement.Rate this question:
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- 29.
'Mass production' is a process where.
- A.
Products are created in batches.
- B.
Very large numbers of the same item is produced.
- C.
Quality assurance is never used.
- D.
Items are created for individual customers.
Correct Answer
B. Very large numbers of the same item is produced.Explanation
Mass production is a manufacturing process in which a large quantity of the same item is produced. This method aims to produce goods on a large scale, usually using assembly lines and specialized machinery. By producing a high volume of identical items, companies can achieve economies of scale, reduce costs, and increase efficiency. This allows for the production of goods at a faster rate and lower cost per unit. Quality assurance is still an essential part of mass production to ensure that the products meet the required standards.Rate this question:
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- 30.
Total revenue uses the formula.
- A.
Price x Quantity Sold
- B.
Sales - Cost of sales
- C.
Gross profit - net profit
- D.
Opening stock - closing stock x unit price.
Correct Answer
A. Price x Quantity SoldExplanation
Total Revenue = Price x Quantity Sold TR = P x Q Here ‘P’ stands for price and ‘Q’ stands for quantity sold (the number of units sold).Rate this question:
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- 31.
In January, a small business realizes that it will have a negative closing balance in May and June. Which of these ideas is the WORST solution?
- A.
Ask suppliers for an extra 30 days trade credit
- B.
Arrange an overdraft for May and June
- C.
Reduce planned expenditure from February to May
- D.
Work hard to find new customers from February to May
Correct Answer
A. Ask suppliers for an extra 30 days trade creditExplanation
The cash flow problem will last longer than 30 days, so this probably won't help in June. Increasing trade credit is only a temporary solution, so it won't fix a long-term cash-flow problem.Rate this question:
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- 32.
Which of these would be included in cost of sales?
- A.
Wages
- B.
Raw materials
- C.
Interest
- D.
Bank loan
Correct Answer
B. Raw materialsExplanation
The cost of sales refers to the direct expenses incurred in producing goods or services. Raw materials are essential components used in the production process, and their cost is directly attributable to the goods being sold. Therefore, raw materials would be included in the cost of sales. Wages, on the other hand, would be categorized as an operating expense, not a cost of sales. Interest and bank loan expenses are financial costs and would not be included in the cost of sales.Rate this question:
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- 33.
A baker has a problem. The price of flour and eggs has gone up, but customers are not prepared to pay more for their cakes. How can the baker protect his net profit and not upset his customers?
- A.
Negotiate longer trade credit with flour and egg suppliers
- B.
Obtain a bank loan
- C.
Reduce the amount of eggs and flour they use
- D.
Negotiate a lower rent
Correct Answer
D. Negotiate a lower rentExplanation
When raw material rise in price, cutting expenses reduces total costs without damaging profit.Rate this question:
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- 34.
Which is NOT true about the Trades Description Act?
- A.
It makes it a criminal offense for businesses to lie about their products
- B.
It prevents businesses from bullying customers.
- C.
It compensates customers for any loss.
- D.
It stops businesses from not giving customers important information.
Correct Answer
C. It compensates customers for any loss.Explanation
The Trades Description Act is a legislation that aims to protect consumers from false or misleading information about products or services. It makes it a criminal offense for businesses to lie about their products, preventing them from misleading customers. It also stops businesses from withholding important information from customers. However, it does not directly compensate customers for any loss they may incur due to false advertising or misrepresentation. Compensation for losses would typically be sought through other legal avenues, such as civil lawsuits or consumer protection agencies.Rate this question:
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- 35.
How are interest rates set in the UK?
- A.
They are decided by the MPC
- B.
They are decided by the EU Banking Committee.
- C.
They are decided by the UK Government
- D.
They are decided by the Governor of the Bank of England
- E.
They are decided by the international market rate
Correct Answer
A. They are decided by the MPCExplanation
Interest rates in the UK are set by the MPC, which stands for the Monetary Policy Committee. The MPC is a committee within the Bank of England that is responsible for making decisions regarding interest rates. They meet regularly to assess the state of the economy and determine whether any changes to interest rates are necessary. The MPC's main objective is to maintain price stability and support the government's economic objectives. By adjusting interest rates, the MPC can influence borrowing costs, inflation, and overall economic activity in the UK.Rate this question:
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- 36.
Which two documents will be compared for short-listing when recruiting new employees? (select that apply)
- A.
Job description
- B.
Advertisement
- C.
Curriculum Vitae or application form
- D.
Person specification
- E.
Selection matrix
Correct Answer(s)
C. Curriculum Vitae or application form
D. Person specificationExplanation
When recruiting new employees, two documents that are typically compared for short-listing are the Curriculum Vitae (CV) or application form and the Person specification. The CV or application form provides information about the candidate's qualifications, work experience, and skills, while the person specification outlines the specific requirements and desired qualities for the role. By comparing these two documents, recruiters can assess whether the candidates meet the necessary criteria and have the relevant experience and skills for the job. The other options listed (job description, advertisement, and selection matrix) are not typically used for short-listing candidates.Rate this question:
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- 37.
Which of these is NOT paid to HMR&C by a private limited company?
- A.
Income tax (PAYE)
- B.
VAT
- C.
NIC (employer contribution)
- D.
Corporation tax
Correct Answer
A. Income tax (PAYE)Explanation
Although collected by the business, employees pay Income TaxRate this question:
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- 38.
Starting a business that fails probably means that.
- A.
Starting another business would be too risky
- B.
Starting another business is more likely to succeed
- C.
Everybody loses a lot of money
- D.
The market research wasn't very good
Correct Answer
B. Starting another business is more likely to succeedExplanation
Starting a business that fails can provide valuable lessons and insights into what went wrong. By learning from these mistakes and applying them to a new business venture, the chances of success are increased. This answer suggests that instead of being discouraged by failure, one should use it as an opportunity to improve and increase the likelihood of success in a future business endeavor.Rate this question:
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- 39.
What is the MAIN reason that new businesses have difficulty calculating risk?
- A.
They have no, or very little, experience of common risks
- B.
They have poor math skills.
- C.
They have difficulty setting the right price.
- D.
They do not do enough market research.
Correct Answer
A. They have no, or very little, experience of common risksExplanation
New businesses often struggle to calculate risk because they lack the necessary experience with common risks. Without prior knowledge or exposure to potential risks, it becomes challenging for them to accurately assess and quantify the potential negative outcomes that may arise. This lack of experience can lead to miscalculations and poor decision-making when it comes to risk management.Rate this question:
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- 40.
Innovation is BEST described as.
- A.
Coming up with a completely new idea
- B.
Making an invention suitable for mass production
- C.
Doing something cheaper or better
- D.
Holding the patent of something new
Correct Answer
B. Making an invention suitable for mass productionExplanation
Innovation is best described as making an invention suitable for mass production. This means taking a new idea or invention and developing it in a way that allows it to be produced on a large scale, making it accessible and available to a wider audience. It involves refining and optimizing the invention's design, processes, and materials to ensure efficiency and cost-effectiveness in manufacturing. By making an invention suitable for mass production, innovation enables widespread adoption and utilization of new technologies, products, or services.Rate this question:
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Current Version
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Apr 22, 2024Quiz Edited by
ProProfs Editorial Team -
Apr 29, 2011Quiz Created by
Badgered
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