1. Intro To Business

Question 1

Sole trader:

Pros

Answer 1

Flexibility
Own boss
Gain 100% of earnings
Minimal paperwork

Question 2

Sole trader cons

Answer 2

Unlimited liability
Owner and business same legal entity
Hard to raise finance
Business suffers when owner falls ill

Question 3

Partnership pros

Answer 3

Simple to set up
Minimal paperwork
Partners can provide specialist skills

Question 4

Partnership cons

Answer 4

• Need to fill out the legal partnership agreement(which shows how profits are shared between partners
• conflict of interest
• unlimited liability- owner and business are the same legal entity

Question 5

Private sector

Answer 5

• operated and owned by private individuals and companies

- firms generally run for profit to earn returns for shareholders

Question 6

Public sector

Answer 6

Businesses and other organisations are owned and run on behalf of the public, either by the government itself or by organisations who are funded by and report to the government

Question 7

Third sector

Answer 7

Volunteer
Charity
Non-profit
Cooperatives

Question 8

Primary sector

Answer 8

• extracting resources naturally
• agriculture
• fishing
• forestry

Question 9

Secondary sector

Answer 9

Make up 19% of the economy
Involves converting natural resources into finished goods
Manufacturing/construction
Assembly plans

Question 10

Tertiary sector

Answer 10

-provision of services
-financial services
Leisure(Pubs,clubs, football)

Question 11

Internal stakeholders

Answer 11

Employees

Shareholders

Question 12

External stakeholders

Answer 12

• environment
• suppliers
• customer
• Government

Question 13

Franchiser pros

Answer 13

• firm may not have to spend a lot to expand

- products necessary for the franchise are controlled by the franchiser

Question 14

Franchiser cons

Answer 14

• cost of supporting franchisees

- the possibility of conflict

Question 15

Franchisee

Advantages

Answer 15

• lower risk(proven business concept)
• support advice and training
• marketing (national)
• may be easier to obtain finance

Question 16

Franchisee

Disadvantages

Answer 16

• profits shared amongst members
• franchise fees and royalties(%of profit)
• supplies have to bought by franchiser

Question 17

determinants of demand/ also known as market forces

Answer 17

- price( we move along the curve)
SHIFTS
-wealth
-government action
-demographic changes 
-Trends
-Advertisement 
-substitutes and complements

Question 18

Determinants of supply

Answer 18

Costs
Price
Taxes
Subsidies