Unit 1

Question 1

Consumer Goods

Answer 1

The physical and tangible goods sold to the general public- include durable and non-durable goods

Question 2

Consumer Services

Answer 2

The non-tangible products sold to the general public

Question 3

Capital Goods

Answer 3

The physical goods used by industry to aid in the production of other goods and services

Question 4

Creating value

Answer 4

increasing the diference between the
cost of purchasing bough-in materials and the price the
finished goods are sold for.

Question 5

Added value

Answer 5

the difference between the cost of purchasing raw materials and the price the finished goods are sold for

Question 6

Opportunity cost

Answer 6

The benefit of the next most desired option which is given up

Question 7

Entrepreneur

Answer 7

Someone who takes the financial risk of starting and managing a new venture

Question 8

Social enterprise

Answer 8

A business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximizing returns to owners

Question 9

Triple bottom line

Answer 9

The three objectives of social enterprises: economic, social, and environmental

Question 10

Primary Sector Business Activity

Answer 10

Firms engaged in industries that extract natural resources so that they can be used and processed by other firms`

Question 11

Secondary sector business activity

Answer 11

Firms that manufacture and process products from natural resources

Question 12

Tertiary sector business activity

Answer 12

Firms that provide services to consumers and other businesses

Question 13

Public sector

Answer 13

Comprises organizations accountable to and controlled by central or local government

Question 14

Private Sector

Answer 14

Comprises businesses owned and controlled by individuals or groups of individuals

Question 15

Mixed economy

Answer 15

Economic resources are owned and controlled by both private and public sectors

Question 16

Command economy

Answer 16

Economic resources owned, planned and controlled by the state

Question 17

Free Market economy

Answer 17

Economic resources owned largely by the private sector with very little state intervention

Question 18

Sole trader

Answer 18

A business in which one person provides the permanent finance and, in return, has full control of the business and is able to keep all the profits

Question 19

Partnership

Answer 19

A business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities

Question 20

Limited Liability

Answer 20

the only liability – or potential loss – a
shareholder has if the company fails is the amount invested
in the company, not the total wealth of the shareholder.

Question 21

Private limited company

Answer 21

A small to medium-sized business that is owned by shareholders who are often members of the same family. This company cannot sell shares to the general public

Question 22

Share

Answer 22

A certificate confirming part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights

Question 23

Shareholder

Answer 23

A person or institution owning shares in a limited company

Question 24

Public limited company

Answer 24

A limited company, often a large business, with the legal right to sell shares to the general public- share prices are quoted on the national stock exchange

Question 25

Memorandum of association

Answer 25

This states the name of the company, the address of the head office through which it can be contacted, the maximum share capital for which the company seeks authorization and the declared aims of the business

Question 26

Articles of association

Answer 26

This document covers the internal workings and control of the business, the names of the directors and the procedures to be followed at meetings.

Question 27

Franchise

Answer 27

A business that uses the name, logo, and trading systems of an existing successful business

Question 28

Joint venture

Answer 28

Two or more businesses agree to work closely together on a particular project and create a separate business division to do so

Question 29

Holding company

Answer 29

a business organization that owns and controls a number of separate businesses, but does not unite the into one unified company

Question 30

Public corporation

Answer 30

a business enterprise owned and controlled by the state - also known as nationalized industry

Question 31

Privatization

Answer 31

Selling state-owned and controlled business organizations to investors in the private sector

Question 32

Revenue

Answer 32

total value of sales made by a business in a given time period.

Question 33

Capital employed

Answer 33

The total value of all long-term finance invested in the business

Question 34

Market capitalization

Answer 34

The total value of a company's issued shares

Question 35

Market share

Answer 35

Sales of the business as a proportion of total market sales

Question 36

Internal growth

Answer 36

Expansion of a business by means of opening new branches, shops, or factories (AKA organic growth)

Question 37

Mission statement

Answer 37

A statement of the business' core objectives aims, phrased in a way to motivate employees and stimulate interest by outside groups

Question 38

SMART

Answer 38

criteria for effective business objectives Specific Measurable Achievable Realistic/relevant Time=specific

Question 39

Corporate social responsibility

Answer 39

This concept applies to those businesses that consider the interests of society by taking responsibility for the impact of their decisions and activities on customers, employees, communities, and the environment

Question 40

Management by objectives

Answer 40

A method of coordinating and motivating all staff in an organization by dividing its overall aim into specific targets for each department, manager, and employee

Question 41

Ethics

Answer 41

The moral guidelines that determine decision making

Question 42

Ethical code of conduct

Answer 42

A document detailing a company's rules and guidelines on staff behavior that must be followed by all employees

Question 43

Stakeholders

Answer 43

People or groups of people who can be affected by, and therefor have an interest in any action by an organization

Question 44

Stakeholder concept

Answer 44

The view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders

Question 45

Social audit

Answer 45

A report on the impact a business has on society. This can cover pollution levels, health and safety record, sources of supplies, customer satisfaction, and contribution to the community