topic 1 Business In The Real World

Question 1

Goods

Answer 1

A physical product (something you can touch)

Question 2

Customer

Answer 2

Someone who pay/buys for the product

Question 3

Entrepreneur

Answer 3

Someone who is willing to take risks involved in starting a business

Question 4

Service

Answer 4

An intangible product (something you can’t touch) e.g. bus journey

Question 5

Consumer

Answer 5

Someone who uses goods or services produced by businesses

Question 6

Social entreprise

Answer 6

A business that is set up to help society rather than to make profit

Question 7

Business

Answer 7

An organisation that provides a good or supplies and services

Question 8

Types of liability

Answer 8

Unlimited and limited liability

Question 9

Unlimited liability

Answer 9

If a problem occurs, the owners personal possessions will be lost

Question 10

Limited liabilty

Answer 10

The owner only loses the amount invested in the business

Question 11

What are the forms of business?

Answer 11

Sole trader, partnership, comapnies (PLC, LTD) and not-for-profit organisations

Question 12

Private sector organisations

Answer 12

Owned by individuals. These businesses are driven by profit.

Question 13

Public sector organisations

Answer 13

An organisation owned by the government they provide goods and services for the benefit of the community not for profit but instead they operate with money raised from taxes

Question 14

What is an objective?

Answer 14

A specific target that turns the aim into something that is easier to measure and assess progress

Question 15

What is aim?

Answer 15

A general goal of a business

Question 16

Survival

Answer 16

A business that has survived even if they lowered the price and made lower profits

Question 17

Profit maximisation

Answer 17

Earning a profit is how much a business makes (revenue) minus the cost (e.g. paying employees)

Question 18

Growth

Answer 18

A business that grows and opens more stores to sell more products to increase revenue

Question 19

Market share

Answer 19

A business that focuses to increase market share and put the business at a vantage point

Question 20

Customer satisfaction

Answer 20

Business that focuses on achieving a particular level of customer satisfaction by providing a better service or a wider range of products than their competitors. Hoping they would get more profits in the long run (meaning customers would come back and tell their friends to gain more customers)

Question 21

Internal Growth

Answer 21

(Also known as Organic Growth) occurs when a business gets bigger by selling more of its products

Question 22

External Growth

Answer 22

(Also known as integration) occurs when a business gets bigger by joining or buying other businesses.

Question 23

Franchise

Answer 23

A franchise occurs when a frachisor sells the right of its product to a frachisee; this is usually in return for a fee and a percentage of a turnover

Question 24

Franchisee

Answer 24

A franchisee buys a franchise usually in return for a fee and percentage of turnover

Question 25

Franchisor

Answer 25

A franchisor sells a franchise usually in return for a fee and percentage of turnover

Question 26

Merger

Answer 26

A merger occurs when two or more businesses join together to form a new business

Question 27

Takeover

Answer 27

A takeover (or acquisition) occurs when one firm gains control of another and buys it up.

Question 28

Horizontal integration

Answer 28

It occurs when one firm joins with another firm at the same stage of the same production process

Question 29

Vertical integration

Answer 29

It occurs when one firm joins with another firm at a different stage of the same production process

Question 30

Backwards vertical integration

Answer 30

When a firm joins with its suppliers

Question 31

Forward vertical integration

Answer 31

When a firm joins with its distributors

Question 32

Conglomerate integration

Answer 32

Occurs when one firm joins together with another firm in a different type of production process

Question 33

Economies of scale

Answer 33

Occurs when a business's unit costs of production fall as its output rises and the business expands

Question 34

Diseconomies of scale

Answer 34

Occurs when the cost per unit increases as a business expands

Question 35

Organic growth

Answer 35

It is an expansion from within a business by expanding the number and/or range of products and/or locations

Question 36

Interest

Answer 36

Money paid by banks as a reward to attract people to save woth them

Question 37

Interest rates

Answer 37

Refer to the cost of borrowing money or the reward of saving money, expressed as a percentage

Question 38

Inflation

Answer 38

Refers to the rate at which prices are increasing. ( e.g. if inflation is 2% prices are generally growing by 2% that year

Question 39

Gross domestic product (GDP)

Answer 39

Measures all the income earned in a country's economy in a year