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Business > Schedule K > Flashcards

Schedule K Flashcards

1
Q

Competition law

A

promote fair competition

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2
Q

price fixing

A

when competitors agree to all provide the same price meaning all can charge higher prices

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3
Q

What are businesses not allowed to do according to competition law (3)

A
  • agree fixed prices with competitors
  • limit production in order to reduce competition
  • separate markets or customers between each other e.g. geographically divide countries with each firm taking a section.
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4
Q

competition policy

A

seeks to improve the competitive nature of markets

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5
Q

competition in markets can be improved by… (3 points)

A
  • Curtailing monopoly power and protecting competitive markets
  • restricting mergers and prohibiting cartels
  • creating fairness in markets for both businesses and consumers so businesses dont abuse power but can make acceptable profits to drive innovation and productivity
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6
Q

advantages of competition policy (4 points)

A
  • encourages enterprising and efficiency
  • creates a wider choice for consumers
  • beneficial to economy
  • quality of products and services
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7
Q

labour market laws

A

collective labour law guarantees certain rights, and places certain restrictions, on groups of employees e.g. trade unions

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8
Q

key features of labour laws (4 points)

A
  • pay: equality
  • pay: national living wage
  • discrimination is illegal
  • legislation gives employees “rights”
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9
Q

environmental law

A
  • legislation designed to influence the behaviour of individuals and businesses in order to decrease the negative environmental impacts
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10
Q

benefits of environmental law (3 points)

A
  • laws prevent/discourage businesses from committing harmful acts against the environment
  • gives businesses a CSR
  • New business opportunities e.g. green tech and innovation
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11
Q

drawbacks of environmental law (2 points)

A
  • may restrict businesses from working as quickly as possible as they are sticking to the rules and regulations
  • could result in increased operating costs for businesses
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12
Q

enterprise explination/definition

A
  • a term relating to the ideas and skills of entrepreneurs, government may want to invest in ways to keep enterprise to help the economy
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13
Q

international trade

A

the exchange of goods between different countries

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14
Q

effect of exchange rates on trade

A

if the $ is worth less than the pound, importing raw materials from the USA will be cheaper, encouraging trade

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15
Q

GDP definition/explanation (2 points)

A
  • Gross domestic product
  • the total value of a country’s output in a year, when the value of GDP increases its called economic growth.
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16
Q

recession

A

when the GDP shrinks twice in a row

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17
Q

how often is GDP measured

A

every 3 months

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18
Q

Expanding economy: consumer confidence

A

increases

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19
Q

Expanding economy: spending

A

increases

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20
Q

Expanding economy: income

A

increases

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21
Q

Expanding economy: unemployment

A

decreases

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22
Q

Expanding economy: prices

A

decrease

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23
Q

Expanding economy: investment

A

increase

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24
Q

Expanding economy: interest rates

A

decrease

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25
Q

Expanding economy: GDP

A

increase

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26
Q

Contracting economy: Consumer confidence

A

Decreases

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27
Q

Contracting economy: spending

A

decreases

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28
Q

Contracting economy: income

A

decreases

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29
Q

Contracting economy: unemployment

A

increases

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30
Q

Contracting economy: prices

A

increase

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31
Q

Contracting economy: investment

A

decrease

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32
Q

Contracting economy: interest rates

A

increase

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33
Q

Contracting economy: GDP

A

decrease

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34
Q

inflation

A

the sustained increase in the average price of goods and services

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35
Q

exchange rates

A

show the price of a currency in terms of another currency

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36
Q

Fiscal policy

A

the manipulation of government spending, taxation and government borrowing to influence the level of economic activity

37
Q

income tax

A

tax on peoples incomes, expresses as a percentage

38
Q

taxation

A

the process of imposing charges on business and individuals by the government

39
Q

direct tax

A

tax imposed on an individual or property

40
Q

indirect tax

A

tax on goods and services

41
Q

corporation tax

A

a tax paid by companies on the profit they have made

42
Q

monetary policy

A

the manipulation of the rate of interest, the money supply and exchange rates to influence the level of economic activity

43
Q

High interest rates: consumer saving

A

increases

44
Q

High interest rates: consumer borrowing

A

decreases

45
Q

High interest rates: investment

A

decreases

46
Q

High interest rates: house prices

A

decrease

47
Q

Low interest rates: Consumer saving

A

decreases

48
Q

Low interest rates: consumer borrowing

A

increases

49
Q

Low interest rates: investment

A

increases

50
Q

Low interest rates: House prices

A

increase

51
Q

Open trade

A

the removal of any trade restrictions between countries

52
Q

advantages of open trade (6 points)

A
  • cheaper goods
  • lower prices for consumers
  • wider variety of products
  • no tariffs on exporting goods
  • increased competition
  • can make community less self reliant
53
Q

disadvantages of open trade (4 points)

A
  • ethical questions
  • human rights questions (sweatshops)
  • can undermine local industries
  • could undermine quality
54
Q

protectionism

A

when an economy introduce barriers to trade, restricting the free movement of goods and services e.g. tariffs.

55
Q

Advantages of protectionism (2 points)

A
  • restricts poor quality goods
  • protects inefficient and unviable businesses
56
Q

Disadvantages of protectionism (2 points)

A
  • reduces variety and volume of goods
  • makes goods more expensive
57
Q

social changes

A

refers to the fluidity of human behaviour and actions that affect demographic and lifestyle

58
Q

urbanisation

A

the movement of people towards cities and away from rural areas. usually increases as country becomes more developed.

59
Q

migration

A

the movement of people between countries

60
Q

advantages of migration (3 points)

A
  • migrants can fill skill gaps
  • UK have an aging population: migrants can be young workers
  • more consumers for businesses = increased sales revenue
61
Q

disadvantages of migration (2 points)

A
  • polish plumber: offer a lower price for a British one to match
  • Puts pressure on public services e.g. hospitals and housing
62
Q

CSR - Corporate social responsibility

A

a business behaving ethically and contributing to economic developments

63
Q

impact of bad CSR

A

People will scrutinise the business on social media which will lead to a bad brand image and loss of customers

64
Q

Carroll’s CSR pyramid: Level 1 (2 points)

A

Economic:
- Responsibilities of businesses to be profitable
- only way to survive and benefit society later on

65
Q

Carroll’s CSR pyramid: level 2 (2 points)

A

Legal:
- responsibility to obey laws and regulations
- e.g. employment, competition and health & safety laws

66
Q

Carroll’s CSR pyramid: level 3 (3 points)

A

Ethical:
- Responsibility to act morally and ethically
- go beyond narrow requirements of the law
- e.g. treatment of suppliers and employees

67
Q

Carroll’s CSR pyramid: level 4 (3 points)

A

philanthropic:
- Responsibility to give back to society
- Discretionary but still important
- e.g. charitable donations

68
Q

drawbacks of Carroll’s pyramid

A
  • Doesn’t take into account the changes in market or performance of a business
69
Q

pros of CSR: finance (2 points)

A
  • Able to attract investors
  • avoid fines and environmental taxes
70
Q

pros of CSR: HR

A
  • increase recruitment, retention and motivation
71
Q

pros of CSR: Marketing (3 points)

A
  • increase brand loyalty
  • CSR=USP= premium pricing
  • positive media attention
72
Q

pros of CSR: operational (2 points)

A
  • Lower production costs through efficient procedures
  • recycling and good supplier relations
73
Q

cons of CSR: financial costs (3 points)

A
  • looking after employees and suppliers
  • green operations
  • appointing a director of CSR
74
Q

cons of CSR: Not meeting corporate objectives (2 points)

A
  • short term = shareholder returns
  • long term = growth - entering new markets
75
Q

cons of CSR: Opportunity costs (2 points)

A
  • time and money spent on CSR
  • Day to day functions
76
Q

Technological change: Marketing (2 points)

A
  • May move to online websites such as instagram
  • no more magazines and newspapers
77
Q

Technological change: Operations

A
  • AI may be able to do a more efficient job as they dont require breaks or get tired
78
Q

Technological change: Finance (3 points)

A
  • AI will decrease costs
  • it can do jobs people are paid to do for free, therefore increased redundancies
  • AI more efficient = lower average unit cost
79
Q

Technological change: HR (3 points)

A
  • AI no sick days
  • AI cant resign, decreased labour turnover
  • increase people to maintain the robots
80
Q

the competitive environment

A
  • relates to the number of firms in the market and how they influence the strategy and behaviour of the other firms
81
Q

Porters 5 forces: Threat of new entrants (3 points)

A
  • increase in new entrants gaining market share = increase in rivalry
  • position of existing firms are stronger if barriers to entering are high
  • low barriers = high threat of new entrants
82
Q

Porters 5 forces: Bargaining power over suppliers (3 points)

A

If a firms suppliers have power they will:
- exercise that power
- sell their products at a higher price
- squeeze industry profits

83
Q

Porters 5 forces: Bargaining power of customers

A
  • powerful customers are able to exert pressure to decrease prices, or increase quality for the same price therefore reduce industry profits
84
Q

Porters 5 forces: threat of substitute products (2 points)

A
  • A sub product can be regarded as something that meets the same need
  • if threat is high then demand will be lower
85
Q

High competitive rivalry will lead to (3 points)

A
  • price wars
  • investment in innovation and new products
  • increase in marketing
    all likely to increase costs and decrease profits
86
Q

High industry profits need… (5 points)

A
  • weak suppliers
  • weak customers
  • high barriers to entry
  • few opportunities for sub products
  • little rivalry
87
Q

Low industry profits need… (5 points)

A
  • strong suppliers
  • strong customers
  • low barriers to entry
  • many sub product opportunities
  • intense rivalry
88
Q

ways to adapt to increased competition (5 points)

A
  • increase differentiation
  • increase customer service
  • increase brand loyalty
  • decrease prices
  • product development

Business (14 decks)

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