NAME:
STUDENT NUMBER:
MODULE CODE: OTE2601
EXAM PERIOD: OCT/NOV 2022
EXAM DATE: 04 NOVEMBER 2022
DECLARATION
I
Student number:
Module code: OTE2601
Hereby declare the following:
I understand UNISA’S policy on plagiarism. This examination is my original work
produced by myself. I have duly acknowledged all the other people’s work (both
electronic and print) through the proper reference techniques as stipulated in this
module.
I have not copied work of others and handed it in as my own. I have also not made my
work available to any fellow students to submit as their own.
Signature: Date: 04 November 2022
1
,QUESTION 1
In South Africa entrepreneurship is seen as a possible means of curbing the high
unemployment rate. Discuss the link between entrepreneurship and the economy.
In your answer refer to:
1.1 The link between entrepreneurship and the economy. (8)
The decade of the 1990s is known as the decade of the entrepreneur all over the world.
Economists predict that the Entrepreneurs' Revolution currently underway in America
will have a far greater economic impact than the Industrial Revolution. Many
industrialised countries have experienced economic recession, high unemployment
rates, and fluctuations in international trade cycles to an extent not seen since World
War II in recent years. This situation has heightened policymakers' and political
decision-makers' interest in the potential role of entrepreneurs in reducing rising
unemployment rates and as a recipe for economic prosperity (Chiu, 2015). However,
the importance of entrepreneurial roles in national economies has only recently been
recognised (Campbell, 2016). 395 The histories of most highly developed countries (we
only mention Japan, South Korea, and Taiwan) clearly show that entrepreneurship is
the most important prerequisite for economic growth and development. In countries with
virtually no raw materials, such as Japan, Taiwan, and Malaysia, an exceptional spirit of
entrepreneurship reigns, and small business enterprises and entrepreneurs play a
critical role. In fact, they account for 80% of all jobs. 396 Entrepreneurship is seen as a
potential solution to South Africa's high unemployment rate. The lack of entrepreneurs is
one of South Africa's most significant economic development constraints. According to
the 2002 Global Entrepreneurship Monitor (GEM) report, South Africa had a lower rate
of entrepreneurial activity than the other 36 countries that participated in the survey.
According to the GEM report, South Africa's education system and cultural norms tend
to work against entrepreneurial mindsets. According to the survey, the most significant
barrier to entrepreneurship is a lack of education and training (Businessmap online
2003).
1.2 Reasons why entrepreneurs are important for the economy. (12)
Entrepreneurs generate employment opportunities. Small businesses,
particularly those in the informal sector, create more jobs than large corporations
in countries all over the world.
Entrepreneurs start the manufacturing process. They are in charge of producing
goods and services. In the manufacturing process, the entrepreneur combines
labor, capital, technology, and raw materials or components. The term
"production process" refers to a wide range of activities, such as trading (e.g.,
selling groceries at a spaza shop) or providing services (e.g. babysitting).
Natural resources remain underground and undeveloped in the absence of
entrepreneurs. Entrepreneurs are required to build a country's economy. South
Africa may be rich in natural resources such as diamonds, gold, oil, coal, and so
2
, on, but remember that natural resources are not required for a country to build a
strong economy and increase its wealth. Most Far Eastern countries have few
natural resources, but the majority of their citizens are entrepreneurs. For
example, Japanese entrepreneurs import raw materials, process them, and then
export them all over the world (as they do with iron ore).
Entrepreneurs are the engines that propel wealth and a higher standard of living.
In comparison to socialism, this is a distinguishing feature of the free market
system. Entrepreneurs typically employ others, which raises their standard of
living. Entrepreneurs benefit other businesses by purchasing their products.
Although educated entrepreneurs are not necessarily better entrepreneurs, they
will be better equipped to know when, where, and how to launch new ventures.
They will also be better equipped to maximize their talents within the community,
both for their own and the community's sake. Entrepreneurship education
provides youth with new economic tools to help them change their perception of
themselves. Many youths are empowered and transformed by the use of new
terminology, business plans, and the experience of generating income from their
own ideas.
Entrepreneurs generate employment opportunities. Small businesses,
particularly those in the informal sector, create more jobs than large corporations
in countries all over the world.
Entrepreneurs start the manufacturing process. They are in charge of producing
goods and services. In the manufacturing process, the entrepreneur combines
labor, capital, technology, and raw materials or components. The term
"production process" refers to a wide range of activities, such as trading (e.g.,
selling groceries at a spaza shop) or providing services (e.g. babysitting).
Natural resources remain underground and undeveloped in the absence of
entrepreneurs. Entrepreneurs are required to build a country's economy. South
Africa may be rich in natural resources such as diamonds, gold, oil, coal, and so
on, but remember that natural resources are not required for a country to build a
strong economy and increase its wealth. Most Far Eastern countries have few
natural resources, but the majority of their citizens are entrepreneurs. For
example, Japanese entrepreneurs import raw materials, process them, and then
export them all over the world (as they do with iron ore). Entrepreneurs are the
engines that propel wealth and a higher standard of living. In comparison to
socialism, this is a distinguishing feature of the free market system.
Entrepreneurs typically employ others, which raises their standard of living.
Entrepreneurs benefit other businesses by purchasing their products.
Although educated entrepreneurs are not necessarily better entrepreneurs, they
will be better equipped to know when, where, and how to launch new ventures.
They will also be better equipped to maximize their talents within the community,
both for their own and the community's sake. Entrepreneurship education
provides youth with new economic tools to help them change their perception of
themselves. Many youths are empowered and transformed by the use of new
3
, terminology, business plans, and the experience of generating income from their
own ideas.
1.3 How a culture of entrepreneurship can be established in South Africa? (5)
Many school leavers and other people seeking to enter the labor force today face the
challenge of creating their own employment opportunities rather than relying on others.
The first section of this learning unit emphasises the benefits of an entrepreneurial
culture for South Africa. Furthermore, Nzimande (2017) states the following about the
importance of cultivating an entrepreneurial culture in South Africa: Entrepreneurial
education should be spread as widely as possible across the educational curriculum, as
school is the only place where the majority of the population can learn. If we do not
catch potential entrepreneurs in the educational net that the school provides, we will
never have the opportunity to develop their entrepreneurial potential.
QUESTION 2
The Law protects the consumer. The price of certain goods is fixed, for example,
the price of specific kinds of bread. This means that nobody is allowed to sell
these goods at more than the fixed price. Discuss the factors (5) which influence
profits. (25)
1. Kind of business
Profit margins differ due to the nature of various types of businesses. Because of the
nature of the goods/services they provide, some businesses make more money than
others. Profits are higher for products and services that are in high/constant demand.
Grocery stores provide food and household items that are needed every day, whereas
gaming stores cater to a specific, non-essential clientele. Because demand for games is
not as consistent as it is for food and household items, the gaming shop's profit is likely
to be lower than that of the grocery store. Some items are also quite expensive to
produce, and the retail shop cannot charge too much for them because no one would
be able to afford them.
2. The element of risk
Well-established industries experience less volatility, resulting in lower profits but also
lower risks. New products or companies do not know how the public/consumers will
react to the product/business and do not know whether or not their product/service will
be in high demand. This increases the risk for the company. The greater the
uncertainty, the higher the risk. However, the uncertainty increases the likelihood of
profit. People invest in new companies/ideas because they expect to make a lot of
money.
3. The competence of the entrepreneur
An entrepreneur with more experience or skills in the relevant field may be more
beneficial in developing a successful business. The entrepreneur's competency will
4
STUDENT NUMBER:
MODULE CODE: OTE2601
EXAM PERIOD: OCT/NOV 2022
EXAM DATE: 04 NOVEMBER 2022
DECLARATION
I
Student number:
Module code: OTE2601
Hereby declare the following:
I understand UNISA’S policy on plagiarism. This examination is my original work
produced by myself. I have duly acknowledged all the other people’s work (both
electronic and print) through the proper reference techniques as stipulated in this
module.
I have not copied work of others and handed it in as my own. I have also not made my
work available to any fellow students to submit as their own.
Signature: Date: 04 November 2022
1
,QUESTION 1
In South Africa entrepreneurship is seen as a possible means of curbing the high
unemployment rate. Discuss the link between entrepreneurship and the economy.
In your answer refer to:
1.1 The link between entrepreneurship and the economy. (8)
The decade of the 1990s is known as the decade of the entrepreneur all over the world.
Economists predict that the Entrepreneurs' Revolution currently underway in America
will have a far greater economic impact than the Industrial Revolution. Many
industrialised countries have experienced economic recession, high unemployment
rates, and fluctuations in international trade cycles to an extent not seen since World
War II in recent years. This situation has heightened policymakers' and political
decision-makers' interest in the potential role of entrepreneurs in reducing rising
unemployment rates and as a recipe for economic prosperity (Chiu, 2015). However,
the importance of entrepreneurial roles in national economies has only recently been
recognised (Campbell, 2016). 395 The histories of most highly developed countries (we
only mention Japan, South Korea, and Taiwan) clearly show that entrepreneurship is
the most important prerequisite for economic growth and development. In countries with
virtually no raw materials, such as Japan, Taiwan, and Malaysia, an exceptional spirit of
entrepreneurship reigns, and small business enterprises and entrepreneurs play a
critical role. In fact, they account for 80% of all jobs. 396 Entrepreneurship is seen as a
potential solution to South Africa's high unemployment rate. The lack of entrepreneurs is
one of South Africa's most significant economic development constraints. According to
the 2002 Global Entrepreneurship Monitor (GEM) report, South Africa had a lower rate
of entrepreneurial activity than the other 36 countries that participated in the survey.
According to the GEM report, South Africa's education system and cultural norms tend
to work against entrepreneurial mindsets. According to the survey, the most significant
barrier to entrepreneurship is a lack of education and training (Businessmap online
2003).
1.2 Reasons why entrepreneurs are important for the economy. (12)
Entrepreneurs generate employment opportunities. Small businesses,
particularly those in the informal sector, create more jobs than large corporations
in countries all over the world.
Entrepreneurs start the manufacturing process. They are in charge of producing
goods and services. In the manufacturing process, the entrepreneur combines
labor, capital, technology, and raw materials or components. The term
"production process" refers to a wide range of activities, such as trading (e.g.,
selling groceries at a spaza shop) or providing services (e.g. babysitting).
Natural resources remain underground and undeveloped in the absence of
entrepreneurs. Entrepreneurs are required to build a country's economy. South
Africa may be rich in natural resources such as diamonds, gold, oil, coal, and so
2
, on, but remember that natural resources are not required for a country to build a
strong economy and increase its wealth. Most Far Eastern countries have few
natural resources, but the majority of their citizens are entrepreneurs. For
example, Japanese entrepreneurs import raw materials, process them, and then
export them all over the world (as they do with iron ore).
Entrepreneurs are the engines that propel wealth and a higher standard of living.
In comparison to socialism, this is a distinguishing feature of the free market
system. Entrepreneurs typically employ others, which raises their standard of
living. Entrepreneurs benefit other businesses by purchasing their products.
Although educated entrepreneurs are not necessarily better entrepreneurs, they
will be better equipped to know when, where, and how to launch new ventures.
They will also be better equipped to maximize their talents within the community,
both for their own and the community's sake. Entrepreneurship education
provides youth with new economic tools to help them change their perception of
themselves. Many youths are empowered and transformed by the use of new
terminology, business plans, and the experience of generating income from their
own ideas.
Entrepreneurs generate employment opportunities. Small businesses,
particularly those in the informal sector, create more jobs than large corporations
in countries all over the world.
Entrepreneurs start the manufacturing process. They are in charge of producing
goods and services. In the manufacturing process, the entrepreneur combines
labor, capital, technology, and raw materials or components. The term
"production process" refers to a wide range of activities, such as trading (e.g.,
selling groceries at a spaza shop) or providing services (e.g. babysitting).
Natural resources remain underground and undeveloped in the absence of
entrepreneurs. Entrepreneurs are required to build a country's economy. South
Africa may be rich in natural resources such as diamonds, gold, oil, coal, and so
on, but remember that natural resources are not required for a country to build a
strong economy and increase its wealth. Most Far Eastern countries have few
natural resources, but the majority of their citizens are entrepreneurs. For
example, Japanese entrepreneurs import raw materials, process them, and then
export them all over the world (as they do with iron ore). Entrepreneurs are the
engines that propel wealth and a higher standard of living. In comparison to
socialism, this is a distinguishing feature of the free market system.
Entrepreneurs typically employ others, which raises their standard of living.
Entrepreneurs benefit other businesses by purchasing their products.
Although educated entrepreneurs are not necessarily better entrepreneurs, they
will be better equipped to know when, where, and how to launch new ventures.
They will also be better equipped to maximize their talents within the community,
both for their own and the community's sake. Entrepreneurship education
provides youth with new economic tools to help them change their perception of
themselves. Many youths are empowered and transformed by the use of new
3
, terminology, business plans, and the experience of generating income from their
own ideas.
1.3 How a culture of entrepreneurship can be established in South Africa? (5)
Many school leavers and other people seeking to enter the labor force today face the
challenge of creating their own employment opportunities rather than relying on others.
The first section of this learning unit emphasises the benefits of an entrepreneurial
culture for South Africa. Furthermore, Nzimande (2017) states the following about the
importance of cultivating an entrepreneurial culture in South Africa: Entrepreneurial
education should be spread as widely as possible across the educational curriculum, as
school is the only place where the majority of the population can learn. If we do not
catch potential entrepreneurs in the educational net that the school provides, we will
never have the opportunity to develop their entrepreneurial potential.
QUESTION 2
The Law protects the consumer. The price of certain goods is fixed, for example,
the price of specific kinds of bread. This means that nobody is allowed to sell
these goods at more than the fixed price. Discuss the factors (5) which influence
profits. (25)
1. Kind of business
Profit margins differ due to the nature of various types of businesses. Because of the
nature of the goods/services they provide, some businesses make more money than
others. Profits are higher for products and services that are in high/constant demand.
Grocery stores provide food and household items that are needed every day, whereas
gaming stores cater to a specific, non-essential clientele. Because demand for games is
not as consistent as it is for food and household items, the gaming shop's profit is likely
to be lower than that of the grocery store. Some items are also quite expensive to
produce, and the retail shop cannot charge too much for them because no one would
be able to afford them.
2. The element of risk
Well-established industries experience less volatility, resulting in lower profits but also
lower risks. New products or companies do not know how the public/consumers will
react to the product/business and do not know whether or not their product/service will
be in high demand. This increases the risk for the company. The greater the
uncertainty, the higher the risk. However, the uncertainty increases the likelihood of
profit. People invest in new companies/ideas because they expect to make a lot of
money.
3. The competence of the entrepreneur
An entrepreneur with more experience or skills in the relevant field may be more
beneficial in developing a successful business. The entrepreneur's competency will
4
