Understanding Business Activity

Question 1

Business activity

Answer 1

Process of producing g and s to satisfy customers needs and wants

Question 2

Need. Want

Answer 2

Need- g and s that is essential for living

Want - g and s that people would like to have, not essential

Question 3

Economic problem

Scarcity

Answer 3

Unlimited wants cannot be met because of limited factor of production
There are not enough goods and services to meet the wants of the population.

Question 4

Factors of production

Answer 4

Resources needed to produce g and s such as CELL

Question 5

Opportunity cost

Answer 5

The benefit that could have been gained from an alternative use of the same resource

Question 6

Specialisation

Answer 6

People or busi. concentrate on what they are best at

Question 7

Division of labour

Answer 7

Production is divided into different task and each employee focus on just one task.

Question 8

Consumer good
Consumer services
Capital goods

Answer 8

Tangible goods that are sold to final cus. Can be seen and touch
Non tangible goods such as insurance services, transport
Physical goods such as machinery and equipment. They are used to produce other goods and servicez

Question 9

How to add value?

Answer 9

Branding, premium service, more feature, convenience,

Question 10

Primary sector
Secondary sector
Tertiary sector

Answer 10

Firms that involve in extraction of natural resources
Firms that produce and manufacture goods from natural resources
Firms that supply services to customers and other busi.

Question 11

Chain of production

Answer 11

The production and supply of goods to the final consumers involves activities from primary, secondary and tertiary sectors busi.

Question 12

Changing importance of busi. classification

Reason

Answer 12

Industrialisation and deindustrialisation
Growing importance and reduced importance

Customers higher income, better education, more leisure time

Change in busi. behaviour
Need for finance to fund expansion, can compete
Need to be able to communicate internally and ex., take advantage
Need to provide better service for employee, Canteen. Increase busi. demand

Question 13

Mixed economy
Private sector
Public sector

Answer 13

An economy that is controlled by both private and public sectors.
Part of the economy that is owned and controlled by an individual and companies for profit.
Part of the economy that is controlled by the government or the state.

Question 14

What to produce, how to produce and for whom to produce.

Answer 14

Private sector, consumer choice, produce the product that most profitability, cus. buying power
Public sector, all govern. decide

Question 15

Entrepreneur
Business plan - 4
Characteristics - 9
Revenue

Answer 15

Person dare to take risk and start up a business.
Detailed written document outline the aim and purpose of the a busi. Use to persuade lenders to finance a busi. proposal
Amount earned from the sales of its products

Market, busi. opportunity, busi., objective, financial forecast

Question 16

Horizontal integration
Forward vertical integration
Backward vertical integration
Conglomerate integration

Answer 16

Brings together two firms in the same insustry who are also in the same sector of busi. activity.
Brings together two firms in the sames industry but one is a customer of the other
Brings together two firms in the sames industry, bust one is a supplier of the other
Brings together two firms who are completely in different industry.

Question 17

Sole trader
Partnership
Private limited company
Public limited company

Answer 17

Busi. owned and controlled by a person who take all the risk and enjoy all the profit the busi. earns
Busi. owned and controlled by two or more people who share responsibilities and day to day task with each other. Share profit and invest money
Limited company that has less than 20 shareholders. These shareholders are not allowed to sell shares to the public.
Limited company that has more than 20 shareholders. Theses shareholders are allowed to sell shares to the public.

Question 18

Unlimited liability
Limited liability
Unincorporated busi.
Shareholder
Ordinary shareholder

Answer 18

If an unincorporated business failed, the owner has to use its personal wealth to finance the debts.
The liability that is limited to the amount the shareholder has invest. Its personal wealth will not be affected if the busi. lose money
Does not have a separate identity from the owner. Owner have unlimited liability for the debt.
Person or organisation who owns share in a limited company.
The owner of the busi.

Question 19

Dividend
Collateral
Franchise
Joint venture
Public corporation

Answer 19

A payment to shareholders as a reward for their investment
Non current asset offered as a security against borrowing
A busi system which the entrepreneur buy the rights to use the brand, name and products of an existing busi.
Two or more business come to an agreement to work together in setting up a separate busi. for this purpose.
Busi. organisation that is owned and controlled by the state.

Question 20

Objective
Market share
Corporate social responsibility
Pressure group
Social enterprise
Stakeholder

Answer 20

A target or aim that the busi. works towards. It should be SMART. Specific, measurable, achievable and agreed, realistic, relevant, time specific

The revenue of a busi. is expressed as a percentage of market revenue.

Business taking responsibilities for the impact of their activities might have on society and the environment.

A group of like-minded people who put pressure on the business and government to influence them so that the policies can be changed. The purpose is to reach a predetermined objective.

Business that has social objective and reinvest most of its profit back into the busi.or into benefiting society at large.
An individual or group that has a interest in a busi. because they are affected by its activities and decisions.