Business definitions

Question 1

What is added Value

Answer 1

the difference between the cost of
production and the price the finished
goods are sold for

Question 2

What is creating value?

Answer 2

increasing the difference between the cost of purchasing bough-in materials and the price the
finished goods are sold for

Question 3

What is an entrepreneur

Answer 3

An entrepreneur is someone who takes the financial risk of starting and managing a new venture

Question 4

What is primary production?

Answer 4

Production where raw materials are extracted. For instance: Coal mining, digging potatoes up, timber oil

Question 5

What is secondary production?

Answer 5

Production where raw materials are turned into a good. For instance, potatoes into French Fries.

Question 6

What is tertiary production?

Answer 6

Production were manufactured goods are retailed to the general public. I.e McDonald’s sells the manufactured fries

Question 7

Opportunity cost

Answer 7

the benefit of the next most desired

option which is given up.

Question 8

Public sector

Answer 8

comprises organisations accountable to and controlled by central or local government (the state).

Question 9

Private Sector

Answer 9

comprises of organisations accountable to and controlled by indiviuals

Question 9

Mixed Economy

Answer 9

economic resources are owned and controlled by both private and public sectors with some state/ govt intervention

Question 10

Free-market economy

Answer 10

Economic resources are owned largely by the private sector with very little state intervention

Question 11

Command economy

Answer 11

economic resources are owned, planned and controlled by the state.

Question 12

What is the common features of a Social Enterprise?

Answer 12

Directly produces products and services.
Have social aims and se ethical ways of achieving them
Need to make surplus or profit to survive as they can’t rely on donations like charities do.

Question 13

Triple Bottom Linear objectives

Answer 13

1. Economic
2. Social
3. Environmental

Question 14

Partnerships

Answer 14

Businesses owned by two or more people with shared capital investment and usually share responsibilities i.e. Dentist, Lawyers/ solicitors.

Question 15

Sole Traders

Answer 15

Business in which one person provides the permanent finance and in return has full control of the business and keeps all of the profits i.e. Window cleaner, plumber, Florist

Question 16

Social Enterprise

Answer 16

business with mainly social
objectives that reinvests most of its profits into benefiting
society rather than maximising returns to owners

Question 17

Consumer goods

Answer 17

the physical and tangible goods sold to

the general public

Question 18

Consumer services

Answer 18

the non-tangible products sold to
the general public – they include hotel accommodation,
insurance services and train journeys

Question 19

Limited Liability

Answer 19

the only liability – or potential loss – a
shareholder has if the company fails is the amount invested
in the company, not the total wealth of the shareholder.

Question 20

Public limited

Answer 20

a limited company, of en a large
business, with the legal right to sell shares to the general
public – share prices are quoted on the national stock
exchange.

Question 21

Private Limited

Answer 21

a small to medium-sized
business that is owned by shareholders who are family members or friends, it cannot sell
shares to the general public

Question 22

Franchise

Answer 22

a business that uses the name, logo and

trading systems of an existing successful business

Question 23

Joint Venture

Answer 23

two or more businesses agree to work
closely together on a particular project and create a
separate business division to do so

Question 24

Ethical Code

Answer 24

A document detailing a company’s rules and guidelines on staff behaviour that must be followed by all employees

Question 25

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