HSC Year 11 Business Studies practice exams with worked answers

A business is an organisation that brings together resources in order to produce goods or services that people are willing to pay for. The resources it uses are often grouped as human resources (people and their skills), financial resources (money), physical resources (buildings, vehicles, machinery and stock) and information resources (data, customer records and know-how). The business combines these inputs through some kind of production process and turns them into outputs that are sold to customers.

This is true whether the business is a one-person lawn-mowing round in Wagga Wagga or a national supermarket chain.

It helps to be precise about the two kinds of output. A good is tangible: it has a physical form, can be stored, and ownership passes to the buyer. A loaf of bread, a surfboard and a tonne of wheat are all goods. A service is intangible: it is an action or activity performed for the customer, it cannot be stored, and it is usually produced and consumed at the same time.

A haircut, a plumbing call-out, a bus trip and a dental check-up are services. Many businesses actually produce a mix. A car dealership sells a physical vehicle (a good) but also provides finance advice, servicing and warranty support (services). When you are asked what a business produces, look carefully at the whole offer, not just the obvious part.

Businesses exist because they satisfy needs and wants. Needs are things people must have to survive, such as food, shelter and clothing. Wants are things that make life more enjoyable but are not essential, such as streaming subscriptions or a holiday in Bali. A business that identifies a need or want that is not being met well, and then organises resources to meet it, has a reason to exist.

If nobody wants what the business makes, it will not survive no matter how efficiently it is run.

The syllabus describes a business in terms of its role, and the first and most basic role is simply this act of production. Without businesses, individuals would have to grow, build and make everything they consume themselves. Specialised businesses can produce at a scale and quality that households cannot, and this is the foundation of a modern economy.