TMA1 Flashcards
What are the factors of production?
Land(oil,…)
Labour(workers,…)
Capital(iPhone,…)
Enterprise(the idea for a business)
What are the sectors of industry?
Primary sector, secondary sector, tertiary sector
What is the primary sector?
if a business grows or extracts a product from the ground. e.g. farmers
What is the secondary sector?
These are business’ who manufacture products e.g. glassmakers
What is the tertiary sector?
These are businesses who provide a service e.g. shops, banks
What are the sectors of the economy?
Private
The Third Sector
Public
What is a private organisation?
An organisation with a profit motive
What is the third sector?
Organisations which are not for profit
What is a public organisation?
Organisations that are funded by the ‘public purse’
What are some of the characteristics of an entrepreneur?
Identifies new business ideas and DEVELOPS the idea
Take the RISK to lose all or part of the investment
Combine factors of production
Hand out strategic and tactical decisions
What is a sole trader?
-Someone who is owned and controlled by one person
-All of their profits go to them alone
-Their own boss, therefore they are responsible for buying stock and paying bills
What are limited liability companies?
They are companies owned by shareholders and controlled by the board of directors
What is a franchise?
A partnership between more than one company
What do the roles of business within society involve?
They involve taking RESOURCES and using them to produce GOODS and SERVICES that peoples use to satisfy their NEEDS and WANTS
Why is customer satisfaction important for a business?
It makes customers return to buy more things, and encourages the customers to spread the shops name and give it a better reputation which increases the business’s sales and profit
What are the advantages of a partnership?
-They can bring in different areas of expertise,
-More finance is available,
-Workload can be shared,
-Easier to raise finance from lenders.
What are the disadvantages of a partnership?
-Partners have unlimited liability
-Profits have to be shared between partners
-Partners may disagree
-If one partner leaves or dies, a new Partnership Agreement has to be set up
How are shares traded in a private limited company?
They are not traded publicly, instead sold to either family or friends
What do private limited company’s need before selling shares?
The permission of the shareholders
How many shareholders can a private limited company have?
There must be a minimum of 1 shareholder and a maximum of 50 shareholders
What does a private limited company need to produce?
It must produce a Memorandum of Association stating the responsibilities of directors and rights of shareholders.
What is a Private Limited Company?
It is a company which is owned by shareholders and controlled by the board of directors
What is a need?
A need is something that is essential to our survival
What is a want?
A want is something that we desire
What is the capital factor?
It is a product which is man made
What is the land factor?
The natural resources use to create a product
What is the Labour factor?
It is the workers which do the jobs, eg. Plumbers, engineers,
What is the enterprise factor?
It is the idea for a business
