Understanding business test

Question 1

What are Needs?

Answer 1

Needs are things humans cannot survive without basic needs and without them they may die. An example would be food and water.

Question 2

What are wants?

Answer 2

Wants can never be fully satisfied as we do not need them to survive an example of these would be football boots.

Question 3

What are goods?

Answer 3

Goods are tangible items we can hold , touch and feel such as cars and televisions.

Question 4

what are services?

Answer 4

Services are performed for customer and include a haircut. Services as cosumed at the point of purchase and are used once. They are intangible

Question 5

What is tangible?

Answer 5

Tangible products are things we can hold touch see and feel. such as phone and a jacket

Question 6

what is intangible?

Answer 6

Items you cannot hold touch see and feel such as services

Question 7

what is a durable good?

Answer 7

Durbale goods are products that are used reapteadly over time such as a cooker.

Question 8

What is non durable goods?

Answer 8

Non durable goods are consumed almost immediately and mainly used only once for example a packet of sweets.

Question 9

what is land?

Answer 9

All natural resources of the world

Question 10

what is labour?

Answer 10

Human input

Question 11

what is capital

Answer 11

money, tools, machinery and equipment.

Question 12

What is enterprise

Answer 12

creative thinking and business know hows of the entrepreneur

Question 13

What is an enterprenuer

Answer 13

A person who has a creative business idea and takes the initiative to turn it into a business.

Question 14

What is the private sector?

Answer 14

Organsations set up and owned by private individuals main aim is to make a profit.

Question 15

What is the public sector?

Answer 15

Set up by the government (national or local) main objective is to provide a equality service.

Question 16

What is the third sector?

Answer 16

Set up by individuals in order to benefit a specific group main objective is to provide a service that the private and public sector does not.

Question 17

What is a sole trader?

Answer 17

A sole trader is a business owned and run by a single person.

Question 18

What are 3 advantages of a sole trader?

Answer 18

They are able to make all the business decisions. They get to keep all the profits and it is very easy to setp up.

Question 19

what are 3 disadvantages of a sole trader?

Answer 19

The workload may be heavy. They have unlimited liability which means they can lose all their personal items to pay any debt if the business fails and it can be difficult to raise finance.

Question 20

What is a partnership?

Answer 20

A partnership is a business owned and run by 2 or more people less than 20.

Question 21

What are 3 advantages of a partnership?

Answer 21

The workload and responsibility is shared. Different partners bring different skills and experiences. Partners can share the financial burden for expenses.

Question 22

What are 3 disadvantages of a partnership?

Answer 22

The profit must be split and they have unlimited liability. Partners may disagree about the business’s direction, management, or work-life balance

Question 23

What is a private limited company?

Answer 23

A private limited company is business owned by of shareholder and run by a board of director. 2 -20 people.

Question 24

What are 3 advantages of a private limited company?

Answer 24

They can raise capital easily by issuing shares. Limited liability meaning share holders only lose the money they put in. Directors and shareholders bring different skills and experiences

Question 25

What are 3 disadvantage of a private limited company

Answer 25

Companies act must be followed. Costly to set up and every year financial statements must be prepared and published

Question 26

What is a business plan?

Answer 26

A business plan is a document which outlines business objectives and how its going to meet them.

Question 27

What is a benefit of having a business plan?

Answer 27

A benefit of having a business plan is it reduces the risk of the business failing as all aspectes have been researched and costed.

Question 28

What does a business plan contain?

Answer 28

It contains informaton about business, marketing, human resources and finance.

Question 29

What are four sources of finance?

Answer 29

Bank loans, leasing, bank overdraft and hire purchase.

Question 30

What are the advantages and disadvantages of bank loans?

Answer 30

The advantages are they are relatively quick and easy to set up. repayments are in regular instalments. The disadvantages is that interest is paid on money borrowed.

Question 31

What are the advantages and disadvantages of leasing .

Answer 31

No large initial payment. Never own the item

Question 32

What are the advantages and disadvantages of bank overdraft.

Answer 32

Can be agreed in advance for many firms a permant facility. No repayment required. Interest rates can be high.

Question 33

What are the advantages and disadvantages of hire purchase.

Answer 33

Fixed repayments help budgeting. The cost is spread making it easier to afford. Items are owned by hire purchase company till last installment is paid.

Question 34

What is customer service and the features and benefits.

Answer 34

Treating customers in such a manner that they are satisfied with the service they have recieved. Two features is producing a quality product/ service and having a bright clean environment. Two benefits is increased profits and fewer complaints.