3.1.1

Question 1

What is a good?

Answer 1

A tangible object

Question 2

What is a Service?

Answer 2

An intangible object

Question 3

What is a product?

Answer 3

A general term that includes a good and service

Question 4

What 4 benefits do businesses bring?

Answer 4

Create employment
Create wealth
Create new products
Can enhance a country’s reputation

Question 5

4 Examples of an input

Answer 5

People
Finance
Resources
Capital requirements

Question 6

3 Examples of an output

Answer 6

Goods
Services
Waste products

Question 7

3 Examples of primary sectors

Answer 7

Agriculture
Mining
Gas extraction

Question 8

3 Examples of secondary sectors

Answer 8

Manufacturing
Construction
Supply of electricity, gas and water

Question 9

Examples of tertiary sectors

Answer 9

The supply of services

Question 10

What does GDP stand for?

Answer 10

Gross Domestic Product

Question 11

What does GDP mean?

Answer 11

Measures total value of the production of an economy, over a period of time.

Question 12

What is a mission statement?

Answer 12

Sets out a businesses overall purpose to direct and stimulate the organisation

Question 13

What is an aim?

Answer 13

Long term plans of a business

Question 14

What is an objective?

Answer 14

Medium to long term goals established to coordinate the business

Question 15

What is the Hierarchy of Objectives in order of most to least? 6

Answer 15

Mission Statement
Corporate Aim
Corporate Objectives 
Corporate Strategy
Functional Objectives 
Functional Tactics

Question 16

What are the SMART Objectives?

Answer 16

Specific
Measurable
Agreed
Realistic
Time specific

Question 17

What are the six common business objectives?

Answer 17

Profit
Cash flow
Growth
Survival
Social, Ethical and Environmental 
Diversification

Question 18

What are Profit Objectives?

Answer 18

When the total revenue exceeds the total costs.

Question 19

What are Growth Objectives?

Answer 19

May include getting a larger market share, it can then exploit its market position and get more profit.

Question 20

What are Survival Objectives?

Answer 20

Helps the business to continue to trading rather then being forced to stop.

Question 21

What are Cash Flow Objectives?

Answer 21

The amount of money going in and our of the business. The business being able to pay debts on time and Get enough revenue to have a substantial profit.

Question 22

What are Social, Ethical, Environment Objectives?

Answer 22

Social: Targets relating to employment and improving working conditions.
Ethical: Targets based on moral principles
Environmental: Targets protecting the environment through the use of sustainable production techniques.

Question 23

What are Diversification Objectives?

Answer 23

Where a firm produces an increased range of unrelated goods and services

Question 24

How do you calculate profit?

Answer 24

Profit = Total Revenue - Total Cost

Question 25

What are business costs?

Answer 25

The expenditures of the business

Question 26

What are Fixed costs?

Answer 26

Expenditures that do not change when the level of output changes.

Question 27

What are variable costs?

Answer 27

Expenditures that change as a result of the changing output levels.

Question 28

How do you calculate variable costs?

Answer 28

Variable Costs = Variable Cost per Unit x Number of Units Sold

Question 29

What are semi-variable costs?

Answer 29

Costs that have Fixed and variable elements

Question 30

What are total costs?

Answer 30

The sum of all costs

Question 31

How to calculate Total Costs?

Answer 31

Total Costs = Variable Costs + Fixed Costs

Question 32

What is business revenue?

Answer 32

The income over a period of time

Question 33

How do you calculate Revenue?

Answer 33

Revenue = Cost per Unit x Number of Units Sold

Question 34

What does the businesses profit depend on?

Answer 34

Profit Margin and Quantity of Sales

Question 35

What is a Profit Margin?

Answer 35

Amount of the final selling price that is profit

Question 36

What does the quantity sold effect?

Answer 36

The amount of profit the business earns

Question 37

What benefits can profit bring to the business?: Customers

Answer 37

A profitable business can attract customers they may think the business are selling desirable quality of products.

Question 38

What benefits can profit bring to the business?: Investments

Answer 38

With high profits, the business can persuade individuals and institutions, like banks, to invest.

Question 39

What benefits can profit bring to the business?: Larger Rivals

Answer 39

Larger rivals could buy the business with a high profit

Question 40

What benefits can profit bring to the business?: Suppliers

Answer 40

Likely to have more confidence of its suppliers.