Final 9 September, answers PDF

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Deffered Part A Q1- What is the meaning of the “Private Enterprise System”. Discuss the four basic rights in a private enterprise system. (Chap 9) - An economic system that rewards firms for their ability to identify and serve the needs and demands of customers. The “private enterprise system” minim...

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Deffered Part A Q1- What is the meaning of the “Private Enterprise System”. Discuss the four basic rights in a private enterprise system. (Chap 9) - An economic system that rewards firms for their ability to identify and serve the needs and demands of customers. The “private enterprise system” minimises government interface in economic activity. - Four basic rights: o Private property is the most basic freedom under the private enterprise system. Every participant has the right to own, use, buy, sell and bequeath most form of property o PES also guarantees business owners the right to all profits – after taxes – they earn through their activities. Although a business is not assured of earning a profit, its owner is legally and ethically entitled to any income it generates in excess of costs. o Freedom of choice means that a PES relies on the potential for citizens to choose their own employment, purchases and investments. For example, they can change jobs, negotiate wages,… A PES maximises individual prosperity by providing alternatives. o The PES also permits fair competition by allowing the public to set rules for competitive activity. Q2- Describe the characteristics of an oligopolistic market. For a new firm seeking to establish itself in such a market, discuss any three barriers to entry might they face? Provide an example to illustrate (Chap 8) Q3- Explain what a demand curve and explain why demand curves normally slope downwards. Provide an example to illustrate. (Chap 6) - The market demand curve shows the quantity of the good demanded by all consumers in the market at each price. The market demand curve is downward sloping, for two resons: at a higher price, each consumer buy less, at high enough prices, some consumers decide not to buy at all – they exit the market Part B

Q1- Describe the process model of creativity, innovation, and entrepreneurship. (Chap 1,2) http://pages.intnet.mu/neoxionix/hans/SUPERGEM/Unit%205%20.pdf

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Q2- Describe the concept of market structure and explain why limited or no competition occurs. Q3- What is the meaning of “exchange of value”? Illustrate your answer with reference to a successful marketing exchange example. (Chap 3) - The essence of marketing is to decvelop mutually beneficial exchange. Exchange involves value creation for all parties to the exchange. Marketers must understand how customers perceive value. Value perceptions vary from one individual to another and they are ever changing. The customer is the focus of all marketing activities and successful marketers are those who view their products in terms of meeting customer needs and wants - The key to successful marketing lies in the creation of a mutually beneficial exchange of value between one party and another: o For the buyer, the benefit is the satisfaction derived from the consumption or ownership of the product. In normal

circumstances, a buyer will only engage in an exchange if that benefit is in excess of what they must give for the product. o For the seller, the benefit is primarily the revenue derived from purchases. In normal circumstances, a seller will only engage in an exchange if that benefit is in excess of the cost of creating and delivering the product. Q4- Identify the market segmentation variables that can be used to define meaningful market segments. Provide one specific example to illustrate (Chap 4) Q5- Describe the four level of a product in the purchase of a personal computer. (Chap 4,5) Exam Part A Q1- Explain the three major issues that prospective entrepreneurs and small business owner must consider before going into business. (chap 11) Q2- In a competitive market, what rule determines the profit-maximising level of output? What is the relationship between a firm’s supply curve and its marginal cost curve? (Chap 7-8) Q3- Discuss the three market strategies: “Mass marketing”, “One to one marketing” and “Target marketing based on segments”. Support your answer with an example for each concept. (Chap 3) + Part B Q1- Identify and describe the four basic inputs that make up factors of production. Provide a specific example for each factor of production that an automotive manufacturer might use. (Chap 7) Q2- Discuss the relevant performance measures for an entrepreneur. Q3- Discuss how shifts in the demand and supply curve affect the equilibrium price and quantity. Illustrate with specific example. (Chap 6) Q4- Explain the four main criteria that can be used to access whether an identified market segmentation scheme can be effectively implemented. (Chap 4)

Q5- Discuss the seven key concepts that define core ideas in economics. (Chap 6)...