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Business A-level > Unit 1 > Flashcards

Unit 1 Flashcards

Introduction to business

1
Q

what are the characteristics of an entrepreneur?

A

-risk taker
-innovative
-initiative
-confident

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2
Q

what is enterprise

A

another word for business

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3
Q

positive effects of entrepreneurial activity

A

-more employment opportunities
-less unemployment
-lower prices
-increased rates of economic growth

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4
Q

negative effect of entrepreneurial activity

A

-leads to redundancies
-higher prices

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5
Q

How would an entrepreneur assess risk?

A

-can they afford to fail financially
-viability of business plan (optimistic or realistic)
-appreciate sacrifices (time consuming, strained relationships and declined mental wellbeing)

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6
Q

the 4 factors of production

A

-land
-labour
-enterprise
-capital

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7
Q

land =

A

natural resources (wood,coal,oil)
do NOT call these raw materials

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8
Q

labour =

A

employees need to be educated and skilled

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9
Q

capital =

A

Money AND assets. E.g machinery.
Leads to efficiency and productivity

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10
Q

4 factors of the decision making process

A

risks
rewards
uncertainty
opportunity cost

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11
Q

economic uncertainty

A

competition
changing production process
interest

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12
Q

opportunity cost

A

the cost of the next best alternative forgone. (missing out on a good opportunity)

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13
Q

added value

A

equivalent to the increase in value that a business creates by undertaking the production process

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14
Q

adding value

A

The difference between the price of the finished product and the cost of the inputs involved in making it.
cost of final product - cost of input

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15
Q

What is a stakeholder?

A

any individual or organisations who have an interest in the activities and decision making of a business

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16
Q

what are shareholders’ best interests for the business

A

growth
profit
dividends

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17
Q

what are the employees’ best interests for the business?

A

salary
safe working conditions
bonuses
promotion opportunity
job security

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18
Q

what are the customers’ best interests for the business?

A

good quality goods and services
value for money

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19
Q

what is the private sector?

A

-privately owned e.g LTD or PLC
-they’re generally run to make a profit
-act ethically
-good customer service

20
Q

what is the public sector?

A

-owned by the community
-profit put back into the company

21
Q

what is the social goals sector (third sector)?

A

-voulantary / charitable work
- e.g oxfam

22
Q

unicorporated means

A

unlimited liability

23
Q

incorporated means

A

limited liability

24
Q

what types of business are unincorporated in the private sector?

A

-sole trader
-partnership

25
Q

what types of business are incorporated in the private sector?

A
  • Private limited company
  • Public limited company
26
Q

Primary sector

A

Activities undertaken by directly using natural resources. 1% of UK economy

27
Q

Secondary sector

A

Converting natural resources into finished goods - 19% of UK economy

28
Q

Tertiary sector

A

Provision (providing) of services - 80% of UK economy

29
Q

Stakeholder

A

Any individual or organisations who have a vested interest in the activities and decision making of a business

30
Q

What do Shareholders/owners want from a business

A

Growth or business, profit, bigger dividends

31
Q

What do managers and employees want from a business

A

Salary, safe working conditions, bonuses, promotion opportunity, job security

32
Q

What do customers want from a business

A

Good quality goods and services. Value for money

33
Q

Who supports cut jobs or close units?

A

Owners, shareholders

34
Q

Who opposes cut jobs or close units?

A

Employees, community, government

35
Q

Who supports adding extra shifts to increase capacity?

A

Customers, government, suppliers

36
Q

Who opposes adding extra shifts to increase capacity?

A

Owners, employees

37
Q

Who supports introducing greater automation?

A

Customers, owners

38
Q

Who opposes introducing greater automation

A

Employees and government

39
Q

Who supports increasing selling prices

A

Owners government

40
Q

Who opposes increasing selling prices

A

Customers

41
Q

Advantages of sole trader

A

Can keep all profits
Don’t have to share sales info
Easier decision making
Greater control
No deed of partnership
Minimal paperwork

42
Q

Disadvantages of sole trader

A

Limited ideas
Unlimited liability
Strained relationships
Can’t sell shares
Harder to raise finance
Non continuity

43
Q

Advantages of partnerships

A

More ideas/ skills
Continuity
Easier to raise finance
Minimal paperwork

44
Q

Disadvantages of partnerships

A

Deed of partnerships
Long decision making time
Unlimited liability
Shared profits

45
Q

Economies of scale

A

Cost/unit becomes lower

46
Q

Advantages of limited liability

A

Easier to raise finance
Stable form of structure

47
Q

Disadvantages of limited liability

A

Greater admin costs
Public disclosure of company information
Directors legal duties

Business A-level (2 decks)

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