Sample Quizzes For Preparation: Enterprise

AS Level Business – Chapter 1.1 Enterprise Quiz

Question 1: What is the primary purpose of business activity?

A. To produce goods for government only
B. To make losses to reduce tax
C. To satisfy human needs and wants
D. To employ only skilled labour

Question 2: Which of the following is not a factor of production?

A. Land
B. Labour
C. Marketing
D. Capital

Question 3: What is the reward for enterprise in a business?

A. Rent
B. Interest
C. Profit
D. Wages

Question 4: Which best defines “adding value”?

A. Increasing costs to raise prices
B. Selling goods at a loss to increase demand
C. Reducing quality to increase profit margin
D. The difference between selling price and cost of inputs

Question 5: What does opportunity cost represent?

A. Total income of a business
B. The gain from choosing a specific option
C. The next best alternative forgone
D. Cost of employee training

Question 6: Which is an example of a dynamic business environment?

A. Constant labour force
B. Static customer preferences
C. Technological innovation
D. Fixed exchange rate

Question 7: Why do many businesses fail in their early stages?

A. Too much market research
B. Excess financial backing
C. Inflexibility and poor planning
D. Effective leadership

Question 8: What is a characteristic of a multinational business?

A. Operates in one country only
B. Manufactures goods only in local markets
C. Has operations in more than one country
D. Does not employ local workers abroad

Question 9: Which of the following is a feature of an intrapreneur?

A. Leaves company to start own business
B. Works independently of any company
C. Takes risks within a business structure
D. Always invests personal capital

Question 10: What quality is essential for both entrepreneurs and intrapreneurs?

A. Risk aversion
B. Creativity
C. Dependence on others
D. Dislike for innovation

Question 11: A barrier to entrepreneurship may include:

A. Excess investment
B. High availability of skilled workers
C. Regulatory red tape
D. High customer demand

Question 12: Which of the following is most associated with uncertainty?

A. A calculated risk
B. A predictable cost
C. Sudden change in government policy
D. Forecasted sales figures

Question 13: Which role do entrepreneurs play in the economy?

A. Increasing government expenditure
B. Reducing employment
C. Driving innovation and job creation
D. Avoiding all forms of risk

Question 14: Intrapreneurship contributes to a firm by:

A. Discouraging employee creativity
B. Promoting external competition
C. Driving internal innovation
D. Reducing employee engagement

Question 15: What is a likely reason for creating a business plan?

A. To avoid taxes
B. To eliminate all risk
C. To attract investors and guide business growth
D. To ensure government takeover

Question 16: Which of the following is a limitation of a business plan?

A. Provides direction
B. Encourages planning
C. May become outdated
D. Helps secure funding

Question 17: Which of the following is included in a business plan?

A. Family tree of the owner
B. Technical drawings
C. Executive summary and financial forecasts
D. Social media handles

Question 18: What does “enterprise” refer to in business?

A. Marketing techniques
B. Organising and taking the risk of business
C. Fixed capital
D. Government subsidy

Question 19: What type of business has only one office in a city?

A. Local
B. National
C. International
D. Multinational

Question 20: The concept of scarcity leads to:

A. Unlimited production
B. Free goods
C. Opportunity cost
D. No economic choices

Question 21: Which of the following is a reward for land?

A. Profit
B. Interest
C. Wages
D. Rent

Question 22: What makes a business environment “dynamic”?

A. Static supply chain
B. Predictable consumer behaviour
C. Regular changes in external factors
D. Long-term economic equilibrium

Question 23: Which of the following is an example of capital?

A. Natural gas
B. A tractor
C. A river
D. A forest

Question 24: A person creating an app within their company without forming a new business is an example of:

A. Shareholder
B. Entrepreneur
C. Capitalist
D. Intrapreneur

Question 25: Why is access to finance a barrier to entrepreneurship?

A. It increases profits
B. It reduces operating risk
C. It limits the ability to start a business
D. It guarantees investor interest

Question 26: What best describes the business environment of a tech startup?

A. Fixed output and predictable market
B. Highly regulated and stable
C. Rapid innovation and competitive change
D. Government-controlled production

Question 27: How does intrapreneurship benefit large organisations?

A. Discourages employee participation
B. Avoids all innovation costs
C. Encourages internal development and change
D. Stops employees from being creative

Question 28: What is the meaning of ‘risk’ in business?

A. A government grant
B. A guaranteed loss
C. A measurable potential for loss or gain
D. A fixed cost

Question 29: What can be a benefit of a business plan?

A. Reduced efficiency
B. Ignoring competitor actions
C. Attracting funding
D. Increased uncertainty

Question 30: Which of these best illustrates the concept of opportunity cost?

A. Using extra labour to increase wages
B. Choosing marketing over product development
C. Cutting prices to increase revenue
D. Selling in both local and global markets

Answer Key and Detailed Explanations – AS Level Business Chapter 1.1 Quiz

1. C. To satisfy human needs and wants
→ The core purpose of business activity is to meet human needs/wants by producing goods and services.

2. C. Marketing
→ Marketing is a function, not a factor of production. The four factors are land, labour, capital, and enterprise.

3. C. Profit
→ Entrepreneurs earn profit for taking risks and combining resources to create business activity.

4. D. The difference between selling price and cost of inputs
→ Adding value is achieved by enhancing the worth of a product beyond input costs.

5. C. The next best alternative forgone
→ Opportunity cost is the value of the alternative you gave up when making a decision.

6. C. Technological innovation
→ Dynamic environments are constantly changing due to technology, consumer trends, etc.

7. C. Inflexibility and poor planning
→ Poor financial planning and inability to adapt often cause new business failure.

8. C. Has operations in more than one country
→ Multinational businesses operate production or service facilities across borders.

9. C. Takes risks within a business structure
→ Intrapreneurs innovate within existing companies without owning them.

10. B. Creativity
→ Both roles require innovation and creative problem-solving to succeed.

11. C. Regulatory red tape
→ Excessive regulation can discourage or delay business start-ups.

12. C. Sudden change in government policy
→ Uncertainty arises from unpredictable changes affecting the business.

13. C. Driving innovation and job creation
→ Entrepreneurs are central to growth and employment in any economy.

14. C. Driving internal innovation
→ Intrapreneurs lead improvements from within, boosting competitiveness.

15. C. To attract investors and guide business growth
→ Business plans clarify objectives and demonstrate viability to stakeholders.

16. C. May become outdated
→ A plan may not reflect real-time changes, limiting its usefulness.

17. C. Executive summary and financial forecasts
→ These are critical components for planning and investor communication.

18. B. Organising and taking the risk of business
→ Enterprise is the act of mobilising the other three factors and bearing risk.

19. A. Local
→ A single-city presence is considered a local business.

20. C. Opportunity cost
→ Scarcity forces decisions, leading to trade-offs between alternatives.

21. D. Rent
→ Landowners receive rent for use of natural resources.

22. C. Regular changes in external factors
→ Dynamic environments are unstable and require continuous adaptation.

23. B. A tractor
→ A man-made tool used in production = capital.

24. D. Intrapreneur
→ Innovates within a firm instead of launching a separate venture.

25. C. It limits the ability to start a business
→ Without finance, it’s hard to buy equipment, hire staff, or start operations.

26. C. Rapid innovation and competitive change
→ Tech startups face continuous innovation and market shifts.

27. C. Encourages internal development and change
→ Intrapreneurs help organisations adapt and grow internally.

28. C. A measurable potential for loss or gain
→ Risk involves known probabilities and outcomes.

29. C. Attracting funding
→ A solid plan can persuade investors and lenders to support the business.

30. B. Choosing marketing over product development
→ Opportunity cost is the value of the next best use of resources.