Chapter 1 .docx - Zhaiquan Darden-Smith Chapter 1 Test Prep Questions LO 1-1 Describe the relationship between profit and risk and show how businesses

Chapter 1 .docx - Zhaiquan Darden-Smith Chapter 1 Test Prep...

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Zhaiquan Darden-Smith Chapter 1 Test Prep Questions LO 1-1 Describe the relationship between profit and risk, and show how businesses and nonprofit organizations can raise the standard of living for all. When starting a business, you have to take a lot of risks in order to make profit. Some risks are greater than others & those greater risks could possibly make more profit. Profit is the amount of money you make after your expenses are paid. To exceed the amount of your expenses you must take risks that you believe could help your business. The nonprofit organizations and business could possibly have lower prices thus increasing the standard of living by giving more opportunities to purchase things. LO 1-2 Explain how entrepreneurship and the other factors of production contribute to the creation of wealth. Businesses rely on entrepreneurs for them to thrive. An example of this was Mexico, they have a lot of workers but not any job opportunities. The entrepreneurs have to create the jobs for them. You can’t have any of the other factors of living without having the
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