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Business > Understanding Business > Flashcards

Understanding Business Flashcards

1
Q

What is land, within context with the factors of production

A

This is the naturally occuring materials that a firm would use eg water, cotton

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2
Q

What is labour, within context of the factors of production

A

This is the human resources used by the organisation eg staff, manager of production

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3
Q

What is capital, within context with the factors of production

A

This is the money and machinery used in the firm

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4
Q

What is enterprise, within context of the factors of production.

A

The entrepreneur, the risk taker, the idea

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5
Q

What are the sectors of industry

A

Primary
Secondary
Tertiary

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6
Q

What is primary, within context of sectors of industry

A

This is the extraction of resources that are later used for goods and services eg farming fishing forestry

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7
Q

What is the secondary sector, within context of the sectors of industry

A

This is the manufacturing of the products with usage of the extracted resources from the ground ie shipbuilding, glass maker

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8
Q

What is tertiary, within context of the sectors of industry

A

This is providing the community with a service eg schools, banks, hospitals

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9
Q

What are the sectors of economy

A

Private
Public
Not for profit (third)

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10
Q

What is private, within context of sectors of economy

A

This is a profitable organisation, aim to make profit

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11
Q

What is public, within context of sectors of economy

A

This is an organisation funded by the public purse

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12
Q

What is not for profit, within context of the sectors of economy

A

An organisation which is not for profit

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13
Q

What are the methods of maximising customer service

A

Researching what their customers really want, something that makes them happy eg surveys
Inviting customers to make comments on their goods/services eg comment cards
Charging fair prices that reflect the product being offered eg not raising gas prices when it is cold
Providing services that their customers want

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14
Q

What is a sole trader

A

A company run and owned by one single person eg corner shops, hairdressers

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15
Q

What is a partnership

A

Company owned by between 2-20 people eg dentists, opticians

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16
Q

What is an LTD

A

Firm that sells shares in business to only family and friends

17
Q

What is a local government organisation

A

Organisation ran by and funded by gov

18
Q

What are the advantages and disadvantages of a sole trader

A 
Adv 
Owner makes all decisions 
Owner takes all profits 
Firm easy to debt up
Decisions easily made

Disadv
Stressful - little time off work
Unlimited liability
Limited sources of finance so little expansion

19
Q

What are the advantages and disadvantages of a partnership

A

Adv
More capital available
Workload shared
Partners can bring in areas of different expertise to business

Disadv 
Partners can disagree 
Profit has to be shared 
Unlimited liability
If partner dies leaves or joined a new partnership agreement has to be set up which is quite costly
20
Q

What are the advantages and disadvantages of an LTD

A

Adv
Can raise more capital
Limited liability
Don’t need to publish annual accounts

Disadv
Have to seek other shareholders permission before selling share to family/friends
Expansion limited to how much money is invested in business

21
Q

What are the advantages and disadvantages of a PLC

A

Adv
Shares quoted on stock market
Business run by board of directors

Disadv
Shareholders can freely sell shares
Shares can fall in value

22
Q

What is an entrepeneur

A

This is a dynamic individual who takes their idea into practice and faces potential humiliation from family and friends if they fail at their idea

23
Q

What were the characteristics of an entrepreneur

A

Identifying new business opportunities and developing the idea
Taking the risk to lose all/part of their investment
Combining all the factors of production together
Setting target for the business
Using his/her money to finance cost of resources

24
Q

What are the objectives

A 
Profit maximisation 
Sales maximisation 
Increase market share 
Growth 
Survival 
Provison of a service 
Social responsibility 
Improving customer satisfaction
25
Q

LOOK TO CHEGG FLASHCARDS

A

LOOK TO CHEGG FLASHCARDS

26
Q

What are the factors of production

A

Land
Labour
Capital
Enterprise

Business (9 decks)

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