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Business A Level > Term 1 > Flashcards

Term 1 Flashcards

1
Q

What is an example of a shortage?

A
  1. Covid
  2. Post brexit
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2
Q

Which way does a demand curve shift due to an increase in demand?

A

Out (right)

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3
Q

What is meant by an increase in demand?

A

The increase in quantity demanded at a given price

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4
Q

What factors may cause an increase in demand?

A

Increase in proportion of income

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5
Q

Which way does the demand curve shift when demand decreases?

A

In (left)

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6
Q

what way does the supply line shift when supply decreases?

A

Goes down (to the left)

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7
Q

Which way does the supply curve move when supply increases?

A

Increases (right)

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8
Q

An example of if cost increases, supply falls?

A

Electricity (supply falls, curve moves to the left)

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9
Q

An example of cost falls, supply increases?

A

Petrol (supply increases, curves move to the right)

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10
Q

Impacts on supply? Good and bad

A

Any type of tax = a decrease in supply

Any type of subsidies (giving Money) = an increase in supply

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11
Q

What is the definition of globalisation?

A

A process by which countries and economies have to become interconnected or the world coming together to trade in each others markets.

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12
Q

What are advantages to globalisation?

A
  1. Economies of scale
  2. Reduction in monopolies
  3. Reduce poverty
  4. Risk mitigation
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13
Q

What are advantages to organic growth?

A
  1. Low risk
  2. Know your market better
  3. More controlled, (business control)
  4. Maintain their own values.
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14
Q

What are disadvantages to organic growth?

A
  1. Long term between investment and return on investment
  2. Growth may be limited and dependent on sales forecasts
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15
Q

What is a local business? And benefits / disadvantages

A

Customer service offer (closer to customers)

B - change quickly to customer needs
D - cannot benefit from eos
D- suseptable to competitors (a new competitor may lower their demand)

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16
Q

What is a international business? and their benefits / disadvantages

A

They distribute worldwide but they are based in one country (import and export)

B - manufacturing plants (benefit from eos)
D / B - distribution = vehicles and warehouses ( cost however can distribute further)
B - greater profit potential

17
Q

What is a multinational business?

A

Where they have manufacturing operation in more than 2 countries and trade worldwide.

18
Q

What are reasons for growth in multinationals?

A
  • emerging economies
    -economies of scale
    -protectionism (taxing imports to protect domestic markets)
    -external growth through takeovers and mergers
19
Q

What are advantages to multinationals?

A
  • increase gdp (add to country through spending, imports and exports)
  • increases job market (decreases unemployment)
  • increases in competition due to customer choice
20
Q

What are disadvantages to multinationals?

A
  • can go against cultural values, beliefs and morals.
21
Q

What factors affect the size of a business?

A
  • market size
  • nature of a product
  • ability to access resources for expansion
22
Q

What are reasons for growth in a business?

A
  • economies of scale
  • risk mitigation
23
Q

Which factors have facilitated globalisation?

A
  • internet
  • e-commerce
  • rise of multinationals
  • communication technologies
24
Q

What are opportunities of globalisation?

A
  1. New markets possibly with high disposable income
  2. Opportunity to move production into countries with lower labour costs
  3. Investment opportunity in infrastructure and production (new factories and technology)
25
Q

What are threats of globalisation?

A
  1. Lower labour costs may damage reputation
  2. Reduced domestic economies as businesses in developing countries begin to produce by themselves
  3. Lack of knowledge / culture differences may threaten global growth
26
Q

What is a brand?

A

Distinctive product offering created by the use of a logo, symbol etc (McDonald’s logo & Nikes tick)

27
Q

What is a global brand?

A

Brand that is recognised throughout the world

28
Q

What are challenges of globalisation?

A
  • increases competition
  • costs of expansion
    -physical distance
    -adaption to cultural and customer behaviour
29
Q

Why do people trade internationally?

A
  • variety
  • specialise
  • to grow
  • reduces costs
  • avoid conflict
30
Q

What is variety?

A

Trade enables countries to obtain products they cannot make themselves or could only

31
Q

What is growth?

A

access to millions of new customers creates potential for businesses therefore the economy to grow

32
Q

What is specialisation?

A

Main advantage of international trade that the company to specialise in e.g. Germans and cars

Business A Level (1 decks)

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