(2.1 in Booklets) 2.5 The External Environment

Question 1

Business Cycle

Answer 1

A cycle or series of economic expansion and contraction

Question 2

Consumer protection law

Answer 2

The law gives customers protection against unfair selling practices

Question 3

Consumer protection act

Answer 3

Protects by:
Prohibiting manufacture and supply of unsafe goods
Making seller of a defective product responsible
Prohibiting misleading price indications

Question 4

Unfair trading regulations

Answer 4

Makes it an offence for trader to make misleading statements about goods or services

Question 5

Data protection act

Answer 5

Controls use of customers information, preventing selling details as businesses must store data securely

Question 6

Consumer rights act

Answer 6

Covers goods, services and digital content and protects consumers from unfair trading

Question 7

Statutory Rights

Answer 7

Legal rights based on laws passed by parliament

Question 8

Contract of Employment

Answer 8

Agreement made between the employer and employee

Question 9

Employment Rights Act

Answer 9

States the duties and rights of employer and employee
Rights to paternity and maternity leave
Details of termination of employment
Right to written contract of employment within 60 days of starting work
Right to a written pay slip

Question 10

Working time regulations act

Answer 10

A limit of an average 48 hours work
A limit of 8hrs work on night shift
Free Health care asessments
11hrs rest a day
Day off each week
In work rest if shift longer than 6 hours
4 weeks paid leave per year

Question 11

National Minimum wage act

Answer 11

Provides employees with decent standards and fairness in work place
Rates set are based on recommendations of low pay commission

Question 12

Environmental protection act

Answer 12

Business has a duty to recycle and face criminal penalties if they fail
Applies to waste and control of emissions

Question 13

Competition Act

Answer 13

No price fixing
Investigate mergers that restrict competition

Question 14

Health and safety at work act

Answer 14

Aim to raise standard and protect public
Places responsibility on employers and employees
If fail to comply can be taken to court and fined

Question 15

Reducing uncertainty

Answer 15

Research- provides the information needed
Contracts- ensures prices, costs and other factors around business to keep them predictable
Diversifying the product portfolio

Question 16

Perfect competition

Answer 16

These are rare, having many competitors offering the same products

Question 17

Monopolistic competition

Answer 17

Many small firms offering differentiated products. Each firm has a small share. e.g. restaurants and small businesses

Question 18

Oligopoly

Answer 18

Markets dominated by a no. small firms. They often will use non-price strategies to compete. Potentially anti-competitive if collusion on price

Question 19

Monopolistic competition vs Oligopoly

Answer 19

For monopolistic: Many sellers offer differentiated products

In Oligopoly: Few sellers supply a sizeable portion of products in the market