Understanding the nature and purpose of business

Question 1

GOOD (examples)

Answer 1

Physical / tangible products e.g. house, suit

Question 2

SERVICE (examples)

Answer 2

An intangible item which is provided for you e.g.

insurance

Question 3

PRODUCT

Answer 3

General term including goods and services.

Question 4

CAPITAL REQUIREMENTS

Answer 4

Buying the things that you need, money for the things to start up/

Question 5

What do businesses do?

Answer 5

1. INPUTS: people, raw materials, land, finance, materials and components.
2. TRANSFORMATION PROCESS: adds value to the products.
3. OUTPUTS: goods, services, WASTE PRODUCTS!

Question 6

3 types of business activity

Answer 6

1. PRIMARY: farming, mining and quarrying, forestry - (extracting raw materials)
2. SECONDARY: manufacturing e.g. making a table
3. TERTIARY: selling e.g. clothes shops

Question 7

CHAIN OF PRODUCTION

Answer 7

PRIMARY - SECONDARY - TERTIARY

Question 8

GDP (gross domestic product)

Answer 8

Measures the total value of the production of an economy over a period of time (total value of goods and services produced).

Question 9

What sector does the majority of Britain’s GDP come from, which industry primarily and why?

Answer 9

Tertiary sector, banking industry as British banks are seen as safe and secure and therefore good for foreign investment.

Question 10

Which sector is in decline in the UK? Why?

Answer 10

Secondary sector due to cheaper manufacturing abroad e.g. China and India - workers willing to work for a lower wage.

Question 11

Which countries/areas of the world dominate the primary sector?

Answer 11

Middle Eastern countries (oil), Brazil and Canada (forestry), Africa (food e.g. bananas, cocoa beans).

Question 12

B2C (BUSINESS TO CONSUMER)

Answer 12

Business supplies products directly to the final consumer.

Question 13

B2B (BUSINESS TO BUSINESS)

Answer 13

Business supply their products to other business organisations.