Business In The Real World

Question 1

Definition of land (4 factors of production)

Answer 1

Somewhere to produce the goods

Question 2

Definition of labour (4 factors of production)

Answer 2

People to work in the business

Question 3

Definition of capital (4 factors of production)

Answer 3

Money to get the business started

Question 4

Definition of enterprise (4 factors of production)

Answer 4

The drive or motivation from the owners to start a business

Question 5

What is a business

Answer 5

A business is an organisation designed to supply a product or a service

Question 6

What is a product

Answer 6

A product is anything capable of satisfying customers needs it is tangible and can be touched

Question 7

What is a service

Answer 7

A service is an act that a business person carries out for you in exchange for money

Question 8

What is the primary sector

Answer 8

This sector is the gaining of materials

Question 9

What is the secondary sector

Answer 9

The goods are manufactured from raw materials into finished goods

Question 10

What is the tertiary sector

Answer 10

When the product is sold in shops and is all the support services for a business.

Question 11

What is a sole trader

Answer 11

A self employed person who owns their own business and retains all of the profit and has a limited liability

Question 12

What is a partnership

Answer 12

A legal arrangement that allows two or more people to share responsibility for a business and has an unlimited liability

Question 13

What is an LTD

Answer 13

It is now a private company meaning shareholders have to be offered shares by the owner it has limited liability

Question 14

What is a PLC

Answer 14

A public company where share holders don’t need to be offered by the owner to have shares it has limited liability

Question 15

What is a companies house

Answer 15

Any limited company or partnership business has to register with Companies House. These records are public and there is usually a fee to register.

Question 16

deed of partnership

Answer 16

A document that is signed by all of the owners of a business setting out the terms they must abide by and their obligations as owners.

Question 17

Dividends

Answer 17

A sum of money paid regularly by a company to its shareholders out of its profits.

Question 18

Economies of scale

Answer 18

Where the average costs (of production, distribution and sales) fall as the business increases the amount of product that it produces, distributes and sells.

Question 19

Grant

Answer 19

A grant is money given to a business, usually by the government or lottery fund, that does not need to be paid back.

Question 20

Hostile takeover

Answer 20

A takeover of one company (called the ‘target company’) by another (called the ‘acquirer’) that is accomplished without the agreement of the target company’s management.

Question 21

Limited liability

Answer 21

When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business

Question 22

Income tax

Answer 22

Tax that someone pays based on their personal income (the money that they earn).

Question 23

Profits

Answer 23

The amount of money made after all costs are deducted.

Question 24

Limited liability

Answer 24

When the business owner or owners are only responsible for business debts up to the value of their financial investment in the business.

Question 25

Share capital

Answer 25

The money raised when a business becomes a public limited company by offering shares in the business in return for capital.

Question 26

Shareholders

Answer 26

A part owner of a private or public limited company.

Question 27

Shares

Answer 27

A percentage or portion of a company

Question 28

Stock market

Answer 28

A centralised market where business shares are traded.

Question 29

Unlimited liability

Answer 29

When the business owner or owners are personally responsible for all the debt of the business, no matter what the value.

Question 30

What is survival

Answer 30

Keeping the business operating for a certain amount of time to begin

Question 31

Make profit/maximising profit

Answer 31

Making the most money possible by reducing cost or increasing revenue

Question 32

What is a stakeholder

Answer 32

Someone who has an intrest or concern in certain business

Question 33

What is are example of stakeholders

Answer 33

Employees, managers, owners, customers, suppliers, government, local community

Question 34

What stakeholder is most likely to have the objective of receiving high dividend payments

Answer 34

Shareholders

Question 35

one way employees could influence a business

Answer 35

By negotiating better working conditions

Question 36

What does the R stand for in RECIPF (location)

Answer 36

Raw materials

Question 37

What does the E stand for in RECIPF (location)

Answer 37

Employement

Question 38

What does C stand for in RECIPF (location)

Answer 38

Competitors

Question 39

What does I stand for in RECIPF (location)

Answer 39

Infrastructure

Question 40

What does the P stand for in RECIPF (location)

Answer 40

Proximity

Question 41

What does the F in RECIPF (location)

Answer 41

Finance

Question 42

What does SIC stand for

Answer 42

Sales up, Image up, Costs down

Question 43

Revenue

Answer 43

The income the firm receives from selling its goods or services. It is also reffered to turnover. It is measured by the number of units sold multiplied by the price

Question 44

Total costs

Answer 44

Fixed costs plus variable costs

Question 45

Fixed cost

Answer 45

Costs that do not change when a business changes its output

Question 46

Variable costs

Answer 46

Costs that vary directly with the business's level of output

Question 47

A business plan

Answer 47

A document setting out what a business does and what ithopes to acheive in the future

Question 48

Business planning

Answer 48

The process of producing a business plan

Question 49

Internal growth/organic growth

Answer 49

A business gets bigger by selling more of its products

Question 50

External growth/integration

Answer 50

A business gets bigger by joining or buying another business

Question 51

What is the market capitalisation

Answer 51

Measure the value of all the companies shares

Question 52

Equation of market capitalisation

Answer 52

Market capitalisation= market price of a share x the number of shares

Question 53

When does a franchise occur

Answer 53

When a franchisor sells the rights to its product to a franchisee which is in return for a fee and percentage turnover

Question 54

Franchisee

Answer 54

Buys a franchise usually in return for a fee and percentage of turnover

Question 55

Franchisor

Answer 55

Sells a franchise usually in return for a fee abd percentage of turnover

Question 56

E-commerce

Answer 56

Buying or selling a product using an electronic system such as the internet

Question 57

Outsourcing

Answer 57

A business uses another business to produce for it

Question 58

A merger

Answer 58

Occurs when two or more businesses join together to form a new business

Question 59

Takeover

Answer 59

One business buys control of another one