2.2

Question 1

Ethics

Answer 1

refers to whether
a business decision is
thought to be morally
right or wrong. An ethical
decision is made on the
basis of what is judged to
be morally right.

Question 2

Profits

Answer 2

Profit measures the
difference between the
values of a business's
revenue sales) and its
total costs.

Question 3

Fair trade products

Answer 3

those for which
customers pay higher
prices and offer better
trading terms, such as
payments with orders.
The aim is to improve the
living standards of people
in poorer countries
where the products are
produced.

Question 4

Social responsibility

Answer 4

an approach to managing
businesses in which the
interests of all groups
in society are taken into
account when making
decisions.

Question 5

The environment

Answer 5

the
natural world in which we
live. It is the landscape
and its natural features
such as the seas, rivers
forests and mountains.

Question 6

External costs

Answer 6

External costs of
production arise when
a business's activities
result in harmful effects
on other people not
directly involved in
production.