Business In The Real World

Question 1

What is the definition of “Goods”

Answer 1

physical items

Question 2

what is the definition of “Services”

Answer 2

actions performed by others to aid a customer

Question 3

name 3 main reasons why businesses are set up

Answer 3

benefit others, see a business opportunity, make a profit

Question 4

name the sectors of the seconomy

Answer 4

primary sector, secondary sector, tertiary sector

Question 5

describe the primary sector

Answer 5

the extraction of natural resources, growing of crops, collection of edible animals from their natural sources

Question 6

describe the secondary sector

Answer 6

they turn raw materials into finished goods, construction of buildings and artefacts

Question 7

describe the tertiary sector

Answer 7

provides services for businesses, consumers

Question 8

outline what an enterprise is

Answer 8

a business that involves identifying business opportunities then taking advantage of them

Question 9

state 4 reasons why someone might want to be an entrepreneur

Answer 9

they’ve identified a gap in the market, they want the independence of being their own boss, they want to follow their interests, they’re not happy with their current job

Question 10

name 3 qualities of an entrepreneur

Answer 10

hardworking, organised, innovative, resilience

Question 11

what are the 4 factors of production

Answer 11

land, labour, capital, enterprise

Question 12

define what is meant by land

Answer 12

land is territory and all of earths natural resources

Question 13

define what is meant by labour

Answer 13

labour is the work done by people who contribute to the production process

Question 14

define what is meant by capital

Answer 14

capital is the equipment, factories and schools

Question 15

define what is meant by enterprise

Answer 15

enterprise refers to the entrepreneurs who take the risks and create things from the 3 other factors of production

Question 16

why would managers look at opportunity costs of decisions

Answer 16

most factors of production are limited and they’ll look at the best way of using them by looking at opportunity costs

Question 17

what is an opportunity cost

Answer 17

the benefit that’s given up in order to do something else-the cost of a choice that’s made

Question 18

what are the types of business ownership structures

Answer 18

sole traders, partnerships, private limited companies, public limited companies, not-for-profit

Question 19

what are the advantages & disadvantages of sole traders

Answer 19

easy to set up, get to be your own boss, you decide what happens to profits; work long hours, unlimited liability, unincorporated

Question 20

what are the advantages & disadvantages of partnerships

Answer 20

more ideas & greater range of skill, shared work, more capital; each partner is legally responsible for the others, more disagreements, profits shared

Question 21

what are the advantages & disadvantages of private limited companies

Answer 21

limited liability, incorporated, easier to get loan; more expensive to set up, legally obliged to publish accounts

Question 22

what are the advantages & disadvantages of public limited companies

Answer 22

more capital raised, limited liability, incorporated; more shared profits, legally obliged to publish accounts publicly

Question 23

what are the different aims of businesses

Answer 23

survival, growth, increase market share, increase shareholder value, maximise profit, do what’s right socially & ethically, achieve customer satisfaction

Question 24

what factors affect the objectives of a business

Answer 24

size of business, level of competition, type of business

Question 25

why might a business change its objective

Answer 25

new legislation, changes in economy, environmental expectations

Question 26

how might a business check it’s success rate

Answer 26

look at their objective and see if they’ve achieved it this can include profits, value of shares, number of employees