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GCSE Business > Topic 1 > Flashcards

Topic 1 Flashcards

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1
Q

What is a variable cost?

A

Variable costs change depending on the output

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2
Q

What is the stock market?

A

The stock market is a place where anyone over the age of 18 can buy shares in a company

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3
Q

What is a fixed cost?

A

A fixed cost is a cost that stays the same regardless of the output

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4
Q

What is a vertical takeover?

A

When a company takes over another business in the same department but different stages
e.g. Tesco buying a farm

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5
Q

Define partnership

A

A business with 2-20 people with unlimited liability

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6
Q

What is a stake holder?

A

Someone who has an interest in the business

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7
Q

What’s the difference between an aim and objective?

A

Aim- somethings general you want to achieve like growth
Objective- a specific goal you want to achieve

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8
Q

What are some aims of a business?

A

-profit
-growth
-market share

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9
Q

Define PLC (public limited company)

A

PLC is a company that is on the stock market and has limited liability

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10
Q

4 main characteristics of an entrepreneur

A
  • confident
  • creative
  • risk taker
  • determined
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11
Q

What does a business plan show?

A
  • future ideas for a business
    -marketing research
    -human research
    -capital
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12
Q

What’s profit?

A

Profit= revenue- total cost

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13
Q

What is a horizontal takeover?

A

When a business takes over another company in the same field
E.g. Tesco taking over Aldi

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14
Q

Define LTD (private limited company)

A

A company with a minimum of 2 people who have limited liability. And only friends and family can buy shares

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15
Q

Define a sole trader

A

A business owned by 1 person with unlimited liability

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16
Q

What’s the difference between limited and unlimited liability?

A

Limited liability- you can only loose your investment
Unlimited liability- you can loose all of your assets

17
Q

Two advantages of a PLC

A

-limited liability
-banks are more willing to lend money
-on the stock market

18
Q

Two disadvantages of a PLC

A

-expensive to go on the stock market
-give information about your business to the government

19
Q

Two advantages of a partnership

A

-smaller
-easier to run

20
Q

Two disadvantages of a partnership

A

-unlimited liability
-partners may have conflict

21
Q

Define Entrepreneur

A

A person who sets up a business or businesses, taking on the financial risks in the hope of profit

22
Q

What is a business plan? (BP)

A

A written document that’s describes your business

23
Q

Why do Entrepreneurs start businesses?

A

-profit
-freedom
-passion/ hobby
-be their own boss

24
Q

What’s is the difference between goods and services?

A

Goods- physical item that you can touch
Service- cannot physically touch (intangible)

25
Q

What are two advantages of an LTD

A

-limited liability
-work with friends and family (they can buy shares)

26
Q

What are two disadvantages of an LTD?

A

-might fall out with owners
-can’t sell shares to the public

27
Q

What is an internal and external stakeholder?

A

Internal- someone inside the company e.g. employees, manager
External- someone outside the company e.g. customers, suppliers

28
Q

What is the purpose of a business?

A

To provide goods and services that customers want and to profit

29
Q

Why are business plans produced?

A
  • helps a business succeed
  • reducing risk of failure
  • identifying markets
  • helps with obtaining finance
30
Q

What does the term “merger” mean

A

When 2 businesses combine

31
Q

What does the term “takeover” mean

A

When a business buy out another business

32
Q

What are 2 examples of external growth

A

-A company buying another company
-A company merging with another company

33
Q

What are the positives of external growth?

A

-quicker
-expertise shared
-mix of customers

34
Q

What are the negatives of external growth?

A

-high risk
-might upset stakeholders

35
Q

What are some positives of internal growth

A

-low risk
-cheap
-keep stakeholders happy

36
Q

What are some negatives of internal growth?

A

-slow

GCSE Business (3 decks)

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