Business In The Real World Flashcards
Includes pages 2-9 in the CGP GCSE AQA Business Revision Guide
What is the definition of “Goods”
physical items
what is the definition of “Services”
actions performed by others to aid a customer
name 3 main reasons why businesses are set up
benefit others, see a business opportunity, make a profit
name the sectors of the seconomy
primary sector, secondary sector, tertiary sector
describe the primary sector
the extraction of natural resources, growing of crops, collection of edible animals from their natural sources
describe the secondary sector
they turn raw materials into finished goods, construction of buildings and artefacts
describe the tertiary sector
provides services for businesses, consumers
outline what an enterprise is
a business that involves identifying business opportunities then taking advantage of them
state 4 reasons why someone might want to be an entrepreneur
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
name 3 qualities of an entrepreneur
hardworking, organised, innovative, resilience
what are the 4 factors of production
land, labour, capital, enterprise
define what is meant by land
land is territory and all of earths natural resources
define what is meant by labour
labour is the work done by people who contribute to the production process
define what is meant by capital
capital is the equipment, factories and schools
define what is meant by enterprise
enterprise refers to the entrepreneurs who take the risks and create things from the 3 other factors of production
why would managers look at opportunity costs of decisions
most factors of production are limited and they’ll look at the best way of using them by looking at opportunity costs
what is an opportunity cost
the benefit that’s given up in order to do something else-the cost of a choice that’s made
what are the types of business ownership structures
sole traders, partnerships, private limited companies, public limited companies, not-for-profit
what are the advantages & disadvantages of sole traders
easy to set up, get to be your own boss, you decide what happens to profits; work long hours, unlimited liability, unincorporated
what are the advantages & disadvantages of partnerships
more ideas & greater range of skill, shared work, more capital; each partner is legally responsible for the others, more disagreements, profits shared
what are the advantages & disadvantages of private limited companies
limited liability, incorporated, easier to get loan; more expensive to set up, legally obliged to publish accounts
what are the advantages & disadvantages of public limited companies
more capital raised, limited liability, incorporated; more shared profits, legally obliged to publish accounts publicly
what are the different aims of businesses
survival, growth, increase market share, increase shareholder value, maximise profit, do what’s right socially & ethically, achieve customer satisfaction
what factors affect the objectives of a business
size of business, level of competition, type of business
why might a business change its objective
new legislation, changes in economy, environmental expectations
how might a business check it’s success rate
look at their objective and see if they’ve achieved it this can include profits, value of shares, number of employees
