Core Knowledge

Question 1

What are the 2 types of price elasticity?

Answer 1

price elastic
price inelastic

Question 2

What is price elastic?

Answer 2

no differentiation
increase sp = significant fall in demand

Question 3

What is price inelastic?

Answer 3

differentiation
increase sp = insignificant fall in demand

Question 4

Price elastic and price inelastic
(greater than or less than)

Answer 4

elastic = greater than 1
inelastic = less than 1

Question 5

What is income elasticity of demand?

Answer 5

YED

Question 6

What is luxury, normal and inferior?
(more than 1 or less than 1)

Answer 6

luxury = more than 1
normal = between 1 and 0
inferior = less than 0

Question 7

What are the 4 types of EOS?

Answer 7

purchasing
technical
marketing
financial

Question 8

What is distribution?

Answer 8

The route a product takes from producer or manufacturer to consumer

Question 9

Distribution process

Answer 9

producer > wholesaler > retailer > customer

Question 10

What are the 2 types of distributions?

Answer 10

Traditional and Direct

Question 11

What is specialisation?

Answer 11

when a business or country focuses on producing just one product or a narrow range of products

Question 12

What are Porter’s Generic Strategies?

Answer 12

Mass Market = cost leadership and differentiation
Niche Market = cost focus and differentiation focus

Question 13

What is a niche market?

Answer 13

a small, specialised market for a particular product or service

Question 14

What is a mass market?

Answer 14

market (a product) on a larger scale

Question 15

What is productivity?
(ONLY USED FOR MANUFACTURING)

Answer 15

the output per worker or per machine in a given time

Question 16

What is capacity utilisation?

Answer 16

the percentage of total capacity that is actually being achieved in a given period

Question 17

What are the 2 methods of motivation?

Answer 17

Financial and non-financial

Question 18

What are the financial methods?

Answer 18

salaries
commission
bonus
profit sharing
performance related pay
share options
fringe benefits
piece rate

Question 19

What are the non-financial methods?

Answer 19

empowerment
praise
promotion
job enrichment
job enlargement
better communication

Question 20

what are salaries?
(financial)

Answer 20

increase pay

Question 21

what are commissions?
(financial)

Answer 21

paying staff a % of the revenue they generate (in addition to their pay)

Question 22

what are bonuses?
(financial)

Answer 22

additional payment on top of salary due to performance

Question 23

what is profit sharing?
(financial)

Answer 23

allocating a certain proportion of annual profits to be shared as a bonus among staff

Question 24

what is performance related pay?
(financial)

Answer 24

rewarding staff whose performance exceeds certain level

Question 25

what is share options?
(financial)

Answer 25

employees offered share of business - receive dividends

Question 26

what are fringe benefits?
(financial)

Answer 26

a form of compensation - additional perks
e.g. company car, retirement plans, gym membership, office child day-care, corporate meal plans

Question 27

what is piece rate?
(financial)

Answer 27

payment in each item produced
★ Taylor

Question 28

what is empowerment?
(non-financial)

Answer 28

passing on power to staff
increased independence

Question 29

what is praise?
(non-financial)

Answer 29

receiving recognition of performance
feeling trusted and valued

Question 30

what is promotion?
(non-financial)

Answer 30

increasing level role of job

Question 31

what is job enrichment?
(non-financial)

Answer 31

giving staff added responsibilities and challenges (higher level of challenge)

Question 32

what is job enlargement?
(non-financial)

Answer 32

increasing number of tasks an employee has to do (same level of challenge)

Question 33

What are the effects of having a motivated workforce?

Answer 33

increased productivity
lower labour turnover
increased innovation
lower absenteeism