C1O Structure

Question 1

What are organisations owned by the government called?

Answer 1

Public sector businesses

Question 2

What sector do businesses owned by shareholders belong to?

Answer 2

Private sector

Question 3

Characteristics of a public good

Answer 3

Non rivalry

Non excludability

Question 4

Characteristics of a private good

Answer 4

Excludable

Rivalry

Question 5

Merit goods are..

Answer 5

Private goods that are underconsumed

Impose an external benefit via positive externalities

Question 6

Demerit goods are…

Answer 6

Private goods that are over consumed

Impose an external cost via negative externalities

Question 7

An economic good has..

Answer 7

A cost to produce/ consume

Question 8

Private sector business objectives

Answer 8

Profit max
Profit scarification 
Survival
Brand loyalty
Quality
Innovation 
Growth
USP 
CSR

Question 9

Public sector business objectives

Answer 9

Trading surplus 
Universal access
Reduce poverty
Public/merit goods
Employment

Question 10

2 types of business

Answer 10

Soul trader

Partnership

Question 11

2 types of companies

Answer 11

Private limited (LTD)
Public limited (PLC)

Question 12

3 types or organisation

Answer 12

Charities
Cooperatives
Social enterprise

Question 13

What is a soul trader?

Answer 13

Individual starts business by their self

Question 14

3 benefits of a soul trader

Answer 14

+ easy to set up
+ no formal audited accounts
+ keep whole profits
+ fast decision

Question 15

3 weaknesses of a soul trader

Answer 15

• limited capital
• unlimited liability
• no illness cover

Question 16

What is a partnership?

Answer 16

Joint ownership of a business with 2-20 people

Deed of partnership is required to solve disputes

Question 17

3 benefits of a partnership

Answer 17

+ relatively easy and cheap to set up
+ can get specialists
+ more capital
+ liability shared

Question 18

3 weaknesses of a partnership

Answer 18

• capital still limited
• can dissolve after death
• unlimited liability
• deed can be hard to create

Question 19

What is a private limited company?

Answer 19

LTD
Has shares, but these are NOT sold to the public
Has board of directors and profits go to shareholders

Question 20

3 benefits of a private limited company

Answer 20

+ limited liability
+ capital easily raised
+ tax advantages
+

Question 21

3 weaknesses of a private limited company?

Answer 21

• greater admin costs
• profit shared to shareholders
• financial info in the public domain
• shares cannot be sold to the public (must be accepted by all other shareholders)

Question 22

What is a public limited company?

Answer 22

PLC
Shares sold to anyone on the stock exchange
Profit go to shareholders via dividend
Run by board of directors

Question 23

3 benefits of a public limited company

Answer 23

+ limited liability
+ capital raised from shares
+ EOS
+ easier finance from banks

Question 24

3 weaknesses of a public limited company

Answer 24

• increased set up costs
• anyone can buy shares
• increased legal requirements
• divorce of owners/managers

Question 25

What is a charity?

Answer 25

Organisations established with aim of collecting money to spend on a cause
Don’t aim for profit but a surplus
Many rely on voluntary donations and charity shops

Question 26

What is a cooperative?

Answer 26

Organisation designed to stop profiteering and exploitation
Established around workplaces
Owned by the members (ie. employees) these gain dividend in money off

Question 27

What is a social enterprise?

Answer 27

Organisation with clear social objectives
Help solve social problems
Aim for profit to reinvest not to give as a dividend

Question 28

Name 5 stakeholders

Answer 28

Customer
Shareholders
Owners / directors
Workers
Suppliers
Governments
Local community
Bank