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buisness flashcards (Y9, Y10, Y11) > Buisness unit 1.1, 1.2, 1.3, 1.4, 1.5 > Flashcards

Buisness unit 1.1, 1.2, 1.3, 1.4, 1.5 Flashcards

1
Q

what is scarcity?

A

when there are needs but not enough products and services to fufill them

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2
Q

what are needs?

A

something necessary

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3
Q

what are wants?

A

something that is not necessary

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4
Q

what is an economic problem?

A

when there are unlimited wants but limited resources to fulfil them (creates scarcity)

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5
Q

what is opportunity cost?

A

is the next best alternative given up by choosing another item

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5
Q

what is specialisation?

A

when people and businesses concentrate on what they are best at.

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6
Q

what is the division of labour?

A

is when the production process is split into different tasks and each worker performs one of the specific tasks only. ​

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6
Q

what is an advantage of division of labour? (2)

A
  • trained one task per worker –> increases efficiency and output
  • less time is wasted moving from one workbench to the other
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7
Q

what is a disadvantage of division of labour? (2)

A
  • workers can be too bored to perform one task –> efficiency might fall
  • one worker absent –> no one can fill in
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8
Q

what is the purpose of buisness activity?

A

to combine the factors of produyction to make products which will satisfy the peoples wants

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9
Q

what is added value?

A

is the difference between the selling price and the cost of bough it materials
(selling price - cost of bought in materials)

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10
Q

why is added value important? (2)

A
  • helps pay for expenses (labour, advertising, bills)
  • helps make a profit
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11
Q

how could a business increase added value? (2)

A
  • by increasing selling price
    -by reducing cost of bought in materials
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12
Q

what is the primary sector?

A

extracts and uses the natural resources of earth to produce raw materials for the buisness

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13
Q

what are examples of the primary sector? (4)

A

-farming
-fishing
-forestry
-oil, copper ore

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14
Q

what is the secondary sector?

A

manufactures goods using the raw materials provided by the primary sector

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15
Q

what are examples of the secondary sector? (3)

A

-car manufacturing
-footwear production
-paper manufacturing

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16
Q

what is the tertiary sector?

A

provides services to consumers and the other sectors of the industry

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17
Q

what are examples of the tertiary sector? (5)

A

-hair salons
-IT services
-banking
-transport
-education

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18
Q

what is a mixed economy?

A

an economy with both a private sector and a public sector

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19
Q

what is a private sector?

A

businesses owed by private individuals and not by the government

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20
Q

what does a private sector do?

A

they decide on the price to charge for the goods/services.

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21
Q

what is the private sector’s aim?

A

to make profit

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22
Q

what is a public sector and where does the money for it come from?

A

a buisness owned and run by the government, the money for these come from taxpayers

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23
Q

what is the objective of a public sector?

A

is to provide welfare to its people in the economy

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24
Q

what are the characteristics of a successful entrepreneur? (4)

A

-hardworking
-risk taker
-creative
-optimistic

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25
Q

what is a buisness plan?

A

a document containing the buissness objectives, details about finance, operations and owners of the business

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26
Q

why is it important for an entrepreneur to create a business plan? (2)

A
  • to apply for bank loans
  • it will force entrepreneurs to think ahead and to try and solve any potential problems
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27
Q

contents for a business plan (5)

A
  1. description of buisnes
  2. products and services they provide
  3. target market
  4. location of business
  5. financial information
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28
Q

why do the governments support new startup firms? (3)

A
  • will create jobs –> reduce unemployment in the country
  • increase output
  • will give consumers more choice of goods and services
29
Q

how do the governments support new firms? (2)

A
  • offer to train entrepreneurs who want to develop more skill
  • offer grants to so they can afford to open up a business
30
Q

why do owners want to expand the business? (3)

A
  • to increase profit
  • to benefit from economies of scale
  • more status and prestige for owners
30
Q

hoe do you measure the size of a business? (4)

A

-number of employees
-the value of output
-the value of sales revenue
-capital employed

30
Q

how can businesses grow what are the two types of growth?

A
  • internal growth
  • external growth
31
Q

what is internal growth?

A

when a business expands its exsiting operatinons

32
Q

what is external growth?and what are the three types

A

when a business takes over or merges with another company (three types - horizontal, vertical, congiomerate)

32
Q

what is horizontal intergration?

A

when a business merges or takes over another buisness in same stage of production

33
Q

what are the benefits of horizontal integration? (2)

A
  • less competition in the same industry
  • benefit for money
34
Q

what are the drawbacks to horizontal integration? (2)

A
  • diseconomies of scale
    -communication in business is more challenging bc the business is bigger
35
Q

why do businesses fail? (3)

A
  • lack of management skills - managers may not make good decisions, like location and production
  • changes in the business environment - new competitors, recessions
  • liquitidy problems - current ratio under 1.5 not being able to pay day to day expenses
36
Q

what is unlimited liability?

A

the owner of the business is responsible for the debts, so their personal possessions might be at risk

37
Q

what are incorporated businesses?

A

businesses that have separate legal status from their owners

38
Q

what are unincorporated businesses?

A

businesses that DONT have separate legal status from their owners

39
Q

what is an advantage of a sole trader? (3)

A
  • get to keep all profits
  • complete control–> make all decisions
  • less legal requirements so it’s easier and cheaper
39
Q

what is a sole trader

A

a business owned by one person

39
Q

what is a partnership?

A

a business owned by two or more people

40
Q

what is a disadvantage of a sole trader? (2)

A
  • unlimited liability
  • limited sources of finance –> less money for machinery
41
Q

what is an advantage of a partnership? (3)

A
  • more money can be invested in the business
  • less stress and responsibility
  • more ideas–> better products
42
Q

what are private limited companies?

A

a business owned by shareholders but they can’t sell shares to the public

43
Q

what is a disadvantage of a partnership? (3)

A
  • profits have to be shared
  • disagreements can happen–>less attention on business
  • unlimited liability
44
Q

what is a disadvantage of a private limited company? (2)

A
  • cannot sell shares to the public –> less capital
  • expensive as there’s a lot of paperwork
45
Q

what are public limited companies?

A

a business owned by shareholders and sell shares to the public

45
Q

what is an advantage of a private limited company? (3)

A
  • can raise more capital
  • limited liability
  • maintain control of business
46
Q

what is an advantage of a public limited company? (2)

A
  • can raise more capital by selling shares to the public
  • limited liability
47
Q

what is a franchise?

A

a buisness with a strong brand name, and the owner gives consent for the franchisee to use the name

48
Q

what is a disadvantage of a public limited company? (3)

A
  • the original owner may lose control
  • needs to pay shareholders dividends so less profit for the original owner
  • expensive as there’s a lot of paperwork
49
Q

what is an advantage of a franchise? (2)

A
  • the franchisor receives part of the profits known as royalties
  • less stress for franchisee
50
Q

what is a disadvantage of a joint venture? (2)

A
  • profits are shared
  • disagreements between businesses
50
Q

what are public corporations?

A

business in the public sector that is owned and controlled by the government

50
Q

what are joint ventures?

A

two or more businesses start a new project together, sharing risks and profits.​

50
Q

what is a disadvantage of a franchise? (2)

A
  • Poor management and a bad reputation of one branch can risk ruining the entire brand’s reputation ​
  • don’t get to keep 100% of profits
51
Q

what is an objective?

A

an aim or a target a business works towards

51
Q

what is an advantage of a joint venture? (3)

A
  • both businesses share the costs of the project
  • risk is shared
  • each business will benefit from other businesses knowledges
52
Q

what is a disadvantage of public cooperation?

A
  • they may not be as efficient as a private company​ because there is no huge profit motive
52
Q

what is an advantage of a public corporation?

A
  • It makes sure consumers are not taken advantage of by privately owned monopolies​
53
Q

why are objectives important? (2)

A
  • they give workers and managers a clear target to work towards, increasing their motivation ​
  • can allow the business to compare against their performance to see if they are successful or not
54
Q

what are some business objectives? (4)

A
  • survival
  • to make profit
  • growth
  • increase in market share
55
Q

what are social enterprises?

A

operated by private individuals but have other objectives other than profit​

56
Q

what are examples of social enterprises? (2)

A
  • helping the community
  • helping the environment
57
Q

what are examples of internal stakeholders and their objective (3)

A
  • owner - they want the business to grow and gain profit ​
  • employees​ - they want a fair salary, good working conditions, job satisfaction and job security ​
  • managers - they want job security and profits
57
Q

what are stakeholders?

A

a person or group who have a direct interest in the performance and activities of the business

58
Q

what are examples of external stakeholders and their objective? (4)

A
  • customers - ​they want safe and reliable products with high quality
  • government - they want to ensure the business is running by the laws, they also want them to succeed because the business can provide jobs ​they can earn corporation tax from business profits
  • the local community - they want to ensure the business doesn’t damage the local community, and they are interested because they might want to get a job
  • banks ​- they want the business to be able to pay back bank loans, with interest ​
59
Q

what are the differences in the objectives of private sector and public sector enterprises​?

A

private sector wants to make profit and public sector enterprises want to provide services to the public, create employment and make profit to have a sustainable business. ​

60
Q

what are the four factors of production?

A
  • land
  • labour
  • capital
  • eneterprise

buisness flashcards (Y9, Y10, Y11) (6 decks)

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