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Business A Level > 1.1/1.2/1.3 Objectives > Flashcards

1.1/1.2/1.3 Objectives Flashcards

1
Q

Why do businesses exist?

A

To satisfy wants and needs.

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2
Q

What is a business?

A

A business is an organisation that is set up to provide goods or services to customers such as the public, government or other organisations.

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3
Q

What is a good?

A

A physical product e.g clothes

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4
Q

What is a service?

A

An intangible item e.g insurance or decoration

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5
Q

What is a product?

A

A more general term which includes goods and services.

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6
Q

Why are businesses important?

A

Create employment
Create wealth
Create new products
Enhance a country’s reputation

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7
Q

What are the 3 types of businesses?

A

Primary
Secondary
Tertiary

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8
Q

What are some common business objectives?

A 
Profit Maximisation
Growth
Survival
Cash Flow
Social and Ethical
Diversification
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9
Q

What are the 4 types of costs?

A

Fixed
Variable
Semi-Variable
Total

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10
Q

What is unit costs?

A

The cost of producing a single unit.

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11
Q

What are the 2 business categories?

A

Public and Private

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12
Q

What are the 3 types of Public Sector Businesses?

A

Public Corporations
Public Services
Municipal Services

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13
Q

What is privatisation?

A

When government sells businesses they own to private individuals.

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14
Q

What 3 documents do businesses have to complete?

A

Memorandum of Association
Articles of Association
Register with Companies House

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15
Q

Market Capitalisation?

A

Share Price x Number of Shares

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16
Q

What is external environment?

A

External forces that can influence a business activities but the business has no control over them.

17
Q

Why are profits important?

A
  • Attractive to customers

- May be taken over

18
Q

What is the public sector?

A

Owned and run by the government

19
Q

What is the private sector?

A

Owned by individuals

20
Q

What are public corporations?

A

Enterprises owned by the state but offer products to both public and private sector

21
Q

What are public services?

A

Provides a service to a nation

E.g NHS

22
Q

What are municipal services?

A

Offered by local governments and councils

e.g leisure centres and libraries

23
Q

Why would the government privatise?

A
  • Raises finance for the government

- Privately run businesses are more efficient

24
Q

What is a sole trader?

A

Business that is owned and managed by one person by may employ other people

25
Q

Sole Trader points?

A
  • Unlimited Liability
  • Easy and cheap to set up
  • Limited sources of finance
  • Long hours
  • Be their own boss
  • No continuity
  • Keep all profit
  • Finances kept private
  • No specialist skills
26
Q

What are partnerships?

A

2 or more people

27
Q

Partnership points?

A
  • Easy and cheap
  • Unlimited liability
  • No continuity
  • Shared profits
  • Specialist skills
  • Additional sources of finance
  • Shared workload
  • Finances kept private
  • Sleeping partners
  • Disagreements
28
Q

What is meant by incorporation?

A

The process of establishing a business as a separate legal identity that allows it to benefit from limited liability.

29
Q

Why buy shares?

A
  • Primarily financial reasons
  • Increased share price
  • Dividends from profits
30
Q

What can influence share price?

A
  • Company’s performance and business environment

- Economy, employment level`

31
Q

What are market conditions?

A

Number of features of a market such as the level of sales, the rate at which they are changing and the number and strengths of competitors.

32
Q

What would be some market conditions?

A
  • Demand
  • Competitors
  • Fashion and technology
  • Suppliers
  • Consumer income
  • Innovation
33
Q

How do businesses pollute?

A
  • Emission of gas in production process
  • Pollution when transporting goods, congestion and noise
  • Dumping
  • Destroying natural environments
34
Q

How have environmental issues been stopped?

A

Legislation Environmental Protection Act 1991 and Environment Act 1995

35
Q

What is fair trade?

A

A fair price is given for a good/service

Business A Level (11 decks)

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