Topic 1

Topic 1 

• What's a business?
• Capitalistic/free market economy
• Functions of a business
• Major forms of business - service and goods producing
• Environmental factors affecting a business

Tutorial Questions 

1.     Joey and Jason have recently obtained a license to set up business. They are free to set up any business of their choice. In the end, they have decided to target a large retiree community and open a music store selling Rap CDs (e.g. Eminem, Snoop Dog). Comment on their decision.

2.     Businesses are good for the society. Discuss how they can contribute. Provide two (2) specific examples for each type of contribution.

3.     Define the term “barrier to entry”. Which type of business (goods-producing or service) has bigger barriers to entry? Why?

4.     List two (2) types of barriers to entry and give one example for each type.

5.     In which economic condition should a business lower the price of its product and services? Why?

6.     Explain what a free market or capitalistic economy means? And a planned economy? 

Answer