Business In The Real World

Question 1

What is a business?

Answer 1

A business is an organization that provides goods or services to satisfy customers.

Question 2

What is a product?

Answer 2

A product is anything that is capable of satisfying customer needs, it is tangible and can be touched

Question 3

What is a service?

Answer 3

A service is an act that a person carries out to satisfy a customer.

Question 4

What is primary sector?

Answer 4

Extracts raw materials from the planet. e.g mining diamonds.

Question 5

What is a Secondary sector?

Answer 5

Goods manafactured from raw materials into finished goods. e.g manafacturers

Question 6

Innovation

Answer 6

The drive to introduce a new product.

Question 7

Sole trader

Answer 7

Single owned business

Question 8

Companies House

Answer 8

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 9

deed of partnership

Answer 9

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 10

Dividends

Answer 10

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

Question 11

Economies of scale

Answer 11

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 12

Grant

Answer 12

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

Question 13

Hostile takeover

Answer 13

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. Instead, the acquirer approaches the company’s shareholders directly or fights to replace the management to get the takeover approved.

Question 14

Income tax

Answer 14

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

Question 15

Limited liability

Answer 15

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

Question 16

Profits

Answer 16

The amount of money made after all costs are deducted.

Question 17

Share capital

Answer 17

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

Question 18

Share holder

Answer 18

A part owner of a private or public limited company.

Question 19

Shares

Answer 19

A percentage or portion of a company.

Question 20

Stock market

Answer 20

A centralised market where business shares are traded.

Question 21

Unlimited liability

Answer 21

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

Question 22

Survival

Answer 22

Keeping the business operating for a certain amount of time

Question 23

Profit maximisation

Answer 23

A process businesses undergo to ensure the best output and price levels are achieved in order to maximise its returns

Question 24

Growth

Answer 24

The increase in a companys size, revenue, market share and profitability over time

Question 25

Increased market share

Answer 25

The higher the market share, the more sales a company has than its competitors in their given industry

Question 26

Revenue

Answer 26

It is the total income a business recieves from selling its goods or services. It can also be referred to as turnover.

Question 27

Total costs

Answer 27

Fixed costs add variable costs

Question 28

Fixed costs

Answer 28

Costs that do not change when a business changes its output

Question 29

Variable costs

Answer 29

Costs that vary directly when the business changes its output

Question 30

Business plan

Answer 30

A document which outlines what a business wants to do and achieve

Question 31

What are the four factors of production

Answer 31

Land
Labour
Capital
Entrepreneurship

Question 32

What is opportunity cost

Answer 32

An opportunity cost is the value of the option not taken when a business makes a decision

Question 33

What are the different stakeholders

Answer 33

. Investors
. Employees
. Suppliers
. Locals
. Customers
.

Question 34

What are stakeholders

Answer 34

People affected by a business

Question 35

What are the three business sectors

Answer 35

Primary
Secondary
tertiary

Question 36

What is a sole trader

Answer 36

A sole trader is a business that is owned and run by one person.

Question 37

What is a private limited company

Answer 37

A private limited company, or LTD, is a company which does not offer stock to the public, and thus its shareholders are normally family, friends and employees. There is no need for an LTD to disclose any financial information to the public.

Question 38

What is a public limited company (plc)

Answer 38

In a Plc, shares are sold to the public on the stock market where business shares are traded

Question 39

What is a share

Answer 39

Share capital is the money invested in a company by the shareholders. Share capital is a long-term source of finance. In return for their investment, shareholders gain a share of the ownership of the company.

Question 40

What is a deed of partership

Answer 40

A formal agreement that needs to be signed when a partenrship is formed