Intro to Business Midterm Review (Chap 1-6) Questions and Answers Fully Solved Latest Version 2025-
2026
Business - AnswersAny LEGAL activity undertaken for the sake of profit
Calculating Profit - AnswersMoney collected - money for running business = profit
Adam Smith - AnswersCame up with idea of capitalism, proposed idea of free will & people can do what
they want
What are the 6 characteristics to all businesses? - Answersrequires organization & effort, attempts to
provide things people need/want, tries to satisfy customers needs, sells products & satisfy needs to
generate revenue, incurs expenses & tries to make more revenue than it incurs in expenses
The Profit Motive - AnswersPeople give up their time, energy & money if there is an incentive to do so
(usually wealth)
Karl Marx - AnswersBelieved the profit motive was a bad thing & businesses exploit their workers,
believed profit was an expression of the capitalists & exploit the labourists
Marxism - AnswersThe ideologies of Karl Marx, states those who owned businesses (capitalists) exploit
those who worked for the business (labourers)
Communism - AnswersPolitical system which states a central authority should control means of
production & businesses
Liberalism - AnswersArgued people will be most productive & society will most benefit when individuals
are left alone to pursue their own self-interest with minor gov intervention, developed from Adam
Smith
What is the main reason businesses fail? - AnswersThey are not willing to undertake risks
Demand - AnswersAbility & desire to get/purchase something
Product - AnswersWhatever a purchaser hopes /believed to get whenever they make a purchase
Public Sector Organizations - AnswersOwned or funded by gov raised taxes
Private Sector Organizations - AnswersPart of economy run by private individuals, usually with aim of
making a profit
Goods - AnswersProducts seen & touched, can be made in advance
Services - AnswersProducts cannot be seen or touched but experiences, performed immediately
Immediacy - AnswersThe quality that makes something important/relevant since its happening there &
then
, High Contact Services - AnswersServices requiring persona interaction with customer (haircuts, taxi rides)
Low Contact Services - AnswersServices that don't necessarily involve interaction with customer
What are the 3 elements a product should deliver? - AnswersFunction (what its intended to do),
Features (Additional attribute contributing to usefulness/better experience of product), Benefits
(advantage that's given from purchasing the product), these elements give a product its value
Value - AnswersThe regard which a product is held by potential buyers (financial worth)
Value Package - AnswersThe bundle of functions that a business offers to buyers of a product
Consumer Products - AnswersProducts purchased for personal use, further broken down into
convenience, shopping & speciality products
Convenience Products - AnswersInexpensive & purchased with little time/effort, consumed regularly
(razors, cups of coffee)
Shopping Products - AnswersModerately expensive & purchased infrequently, moderate time/effort
into purchasing (cars, contractors, computers)
Speciality Products - AnswersGreat deal of importance, good deal of time & effort spent deciding
(wedding gown)
Industrial Products - AnswersThe parts, materials & supplies that are bought by one business from
another in process of making consumer products
Research & Development (R&D) - AnswersChanging tastes/new tech renders products unimportant, so
businesses devote effort looking for innovations & ideas leading to next generation of products
Product Life Cycle - AnswersThe introduction, growth, maturity, decline & demise of products &
industries as technology & tastes change
Introduction Stage - AnswersFirst created, little is known about it, profits lost & sales relatively less
Growth Stage - AnswersDemand expands rapidly, decrease in cost to produce = lower selling price =
growth in demand & sales
Maturity Stage - AnswersSales peak
Decline Stage - AnswersDemand, prices & profits fall & number of competitors decline, introduction of
new things performing same function better
Life Cycle Extension - AnswersAny effort by business to repackage, relaunch or update a mature but well
known product
Factors of Production - AnswersBasic building blocks used to produce anything in a business (natural
resources, labour, capital, entrepreneurship & argued fifth of information)
2026
Business - AnswersAny LEGAL activity undertaken for the sake of profit
Calculating Profit - AnswersMoney collected - money for running business = profit
Adam Smith - AnswersCame up with idea of capitalism, proposed idea of free will & people can do what
they want
What are the 6 characteristics to all businesses? - Answersrequires organization & effort, attempts to
provide things people need/want, tries to satisfy customers needs, sells products & satisfy needs to
generate revenue, incurs expenses & tries to make more revenue than it incurs in expenses
The Profit Motive - AnswersPeople give up their time, energy & money if there is an incentive to do so
(usually wealth)
Karl Marx - AnswersBelieved the profit motive was a bad thing & businesses exploit their workers,
believed profit was an expression of the capitalists & exploit the labourists
Marxism - AnswersThe ideologies of Karl Marx, states those who owned businesses (capitalists) exploit
those who worked for the business (labourers)
Communism - AnswersPolitical system which states a central authority should control means of
production & businesses
Liberalism - AnswersArgued people will be most productive & society will most benefit when individuals
are left alone to pursue their own self-interest with minor gov intervention, developed from Adam
Smith
What is the main reason businesses fail? - AnswersThey are not willing to undertake risks
Demand - AnswersAbility & desire to get/purchase something
Product - AnswersWhatever a purchaser hopes /believed to get whenever they make a purchase
Public Sector Organizations - AnswersOwned or funded by gov raised taxes
Private Sector Organizations - AnswersPart of economy run by private individuals, usually with aim of
making a profit
Goods - AnswersProducts seen & touched, can be made in advance
Services - AnswersProducts cannot be seen or touched but experiences, performed immediately
Immediacy - AnswersThe quality that makes something important/relevant since its happening there &
then
, High Contact Services - AnswersServices requiring persona interaction with customer (haircuts, taxi rides)
Low Contact Services - AnswersServices that don't necessarily involve interaction with customer
What are the 3 elements a product should deliver? - AnswersFunction (what its intended to do),
Features (Additional attribute contributing to usefulness/better experience of product), Benefits
(advantage that's given from purchasing the product), these elements give a product its value
Value - AnswersThe regard which a product is held by potential buyers (financial worth)
Value Package - AnswersThe bundle of functions that a business offers to buyers of a product
Consumer Products - AnswersProducts purchased for personal use, further broken down into
convenience, shopping & speciality products
Convenience Products - AnswersInexpensive & purchased with little time/effort, consumed regularly
(razors, cups of coffee)
Shopping Products - AnswersModerately expensive & purchased infrequently, moderate time/effort
into purchasing (cars, contractors, computers)
Speciality Products - AnswersGreat deal of importance, good deal of time & effort spent deciding
(wedding gown)
Industrial Products - AnswersThe parts, materials & supplies that are bought by one business from
another in process of making consumer products
Research & Development (R&D) - AnswersChanging tastes/new tech renders products unimportant, so
businesses devote effort looking for innovations & ideas leading to next generation of products
Product Life Cycle - AnswersThe introduction, growth, maturity, decline & demise of products &
industries as technology & tastes change
Introduction Stage - AnswersFirst created, little is known about it, profits lost & sales relatively less
Growth Stage - AnswersDemand expands rapidly, decrease in cost to produce = lower selling price =
growth in demand & sales
Maturity Stage - AnswersSales peak
Decline Stage - AnswersDemand, prices & profits fall & number of competitors decline, introduction of
new things performing same function better
Life Cycle Extension - AnswersAny effort by business to repackage, relaunch or update a mature but well
known product
Factors of Production - AnswersBasic building blocks used to produce anything in a business (natural
resources, labour, capital, entrepreneurship & argued fifth of information)
