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GCSE Business > Chapter 2 > Flashcards

Chapter 2 Flashcards

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1
Q

What is the national minimum wage?

A

Workers aged 24 and under but of school leaving age have to be paid the national minimum wage

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2
Q

What is the national living wage?

A

Workers aged over 25 and over have to be paid the national living wage. Slightly more than the minimum wage.

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3
Q

How does the living and minimum wage affect businesses?

A
  • cannot cut costs
  • if a company doesn’t pay its workers enough they get large fines
  • they can increase the costs , which will effect the firms profit
  • can lead to better motivated staff
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4
Q

What does the equality act 2010 state?

A

Recruitment procedures cannot discriminate against anyone for example on religion ,gender,race,age,sexual orientation or disabilities. Also all employees must be paid the same if they do work of an equal value

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5
Q

What will they company pay if they discriminate against someone?

A

Pay compensation

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6
Q

What is the health and safety act of 1974?

A
  • requires all employers and their employees to take responsibility for health and safety
  • firms need to carry out risk assessments
  • need to take steps to reduce risks , all staff must be trained
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7
Q

What is an advantage of a business keeping a safe workplace?

A
  • Fewer accidents means a more productive workforce
  • encourage people to apply to company as they know they are safe
  • prevent prosecution and fines
  • prevent bad publicity
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8
Q

Disadvantages of having a safe workplace?

A

Can be expensive

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9
Q

What does the consumer rights act 2015?

A
  • product has to be fit for its purpose
  • product should match its description
  • product should be satisfactory
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10
Q

Point of consumer law?

A

Protect the consumer from being exploited

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11
Q

How the consumer law affects businesses?

A
  • if a business breaks consumer law it will be faced with costs and inconvenience
  • could end up in court or prosecuted
  • breaking consumer law can harm the businesses reputation
  • businesses have to be careful when selling products
  • need to train staff properly to avoid making mistakes
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12
Q

How can firms use technology to communicate with stakeholders?

A
  • social media
  • web sites
  • email
  • mobile apps
  • live chats
  • video calls
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13
Q

How has the development of information and communications technology (ICT)?

A

Improve the businesses efficiency . Computers can do jobs more quickly. More training will be needed to and also equipment is expensive

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14
Q

What is e-commerce

A

Using the internet to buy or sell products

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15
Q

How does e-commerce effect the business?

A
  • websites help sell product to wider market

- firms have to adapt and will need more employees and system to distribute their product

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16
Q

What are ethics?

A

Moral principles of right and wrong

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17
Q

What are ethical policies?

A

A way a firm developed ways of working with stakeholders think are fair and honest

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18
Q

Advantages of acting ethically ?

A
  • able to market policies
  • get a good reputation
  • more likely to a get more investment
  • potentially a more motivated workforce , which will lead to a higher productivity
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19
Q

Disadvantages of acting ethically ?

A
  • higher labour costs as have to pay employees
  • ethically sourced materials may cost more
  • may have less profit as will increase costs per unit
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20
Q

How business harm environment ?

A

Produce waste which may end up at a land full

Cause traffic congestion

Factories cars and lorries cause pollution

21
Q

What is sustainability ?

A

Working in a way that doesn’t damage the earth for future generations

22
Q

How will global businesses damage the earths environment?

A

Resource depletion- use of non renewable resources

Global warming- many industries release carbon dioxide

23
Q

What are the advantages of being environmentally friendly?

A
  • people like to buy from environmentally friendly companies and goods
  • gives firm a good reputation
24
Q

Negatives of being environmentally friendly ?

A

-could lewd to higher costs , like mew equipment and developing new processes in order to be more sustainable-can be expensive.

25
Q

What is unemployment?

A

When somebody is able to work but doesnt have a job

26
Q

What does unemployment mean for the economy?

A

Produces less output than if everyone was employed

27
Q

How can firms benefit from unemployment?

A

Able to pay lower wages to workers ,also will be able to fill jobs easily

28
Q

How can high unemployment effect businesses negatively ?

A

Less people able to buy wants as they do jot have enough money to spend. Lack of demand for most products

29
Q

What happens if prices rise at a faster rate than income?

A
  • people will spend more on needs, such as rent, electricity , food
  • businesses that provide wants will suffer
30
Q

What happens if prices rise at a slower rate than income?

A

-people will spend less on needs. More money to spend on wants , so demand for these goods and services will go up.

31
Q

What is interest?

A

When you borrow money you have to pay back interest , so you have to pay back more than you borrowed

32
Q

Who sets the base interest rate?

A

Bank of england

33
Q

What does low interest rates lead too?

A
  • cheaper to borrow money, so consumers and firms borrow borrow more and save less
  • consumers will have more money to spend so demand for goods and services increases. Firms are more likely to make a profit and may need to increase output.
  • also decrease costs of businesses as small loan repayments
34
Q

What does high interest rates lead too?

A
  • borrowing money becomes more expensive , but savers get better returns on investments.
  • firms and consumers will have less money available to spend, higher rates on loans, so will save more.
  • reduces demands for products and may lead to decrease in profit and more unemployment
35
Q

What three things can markets mean?

A

1) place where goods are traded between customers and suppliers, e.g internet shop or village market
2) trade in a particular type of product , e.g oil market
3) potential customers for a product , e.g 18-25 age market

36
Q

What is a competitive market?

A

One where large numbers of producers selling to a large number of consuemrrs

37
Q

What effects does operating in a competitive market have on a business?

A
  • nobody powerful enough to dictate price, forces producers to be efficient
  • firms need to convince their product is the best, could be costly to provide high quality products, training , promotion
  • firms will rush to fill gaps in the market
38
Q

When will businesses have very little competition?

A
  • when a brand new product is created
  • specialist products not many people will want to buy
  • some markets are hard to start a business in because the start up cost is very high
  • monopolies
39
Q

What is globalisation?

A

Process by which businesses and countries around the world become more connected . It has resulted in a single businesses operating in lots of countries.

40
Q

How the uk can stand out around the world?

A
  • lots of money in design

- reputation for high quality products

41
Q

How can globalisation be a positive thing for uk businesses?

A
  • having larger markets can lead to increase sales and higher profits. Having a larger market to buy from may mean cheaper supply costs.
  • easier for businesses to set up factories in other countries.
  • more opportunity in a greater market
42
Q

Drawbacks of globalisation?

A
  • higher wages in uk means industries cant compete with firms from other countries, more competition
  • exchange rates effect business if interacting with other countries
  • bad publicity if unethical behaviour in countries.
43
Q

What are exchange rates?

A

The cost of another currency compared to another.if companies want to import products , have to pay for it in the currency of the country it was made in

44
Q

How does a weak pound effect the economy?

A
  • exports less expensive abroad

- imports are more expensive , raw materials from other countries will be more expensive

45
Q

How does a strong pound affect the economy?

A

-exports more expensive and imports cheaper

46
Q

Why might someone start a business?

A
  • financial objectives
  • want to be own boss, want to follow passion
  • want a challenge
  • want to benefit others
47
Q

What are the risks in running a business?

A
  • Starting a business, need money , more likely to fail , needs to make profit
  • health of economy
  • actions of competitiors
48
Q

What can businesses do to reduce risks?

A

1) planning

2) researching

GCSE Business (6 decks)

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