Unit 1 ( business activity)

Question 1

Needs

Answer 1

Goods or services that we need to survive

Question 2

Want

Answer 2

Goods and services people or consumers desire but aren’t essential for living

Question 3

Business Activity

Answer 3

the process of producing goods and services to satisfy consumer demand

Question 4

Economic problem

Answer 4

Unlimited wants can’t be met because there are limited resources (factors of production)

Question 5

Scarcity

Answer 5

There are not enough goods and services (supply) to meet the demands of the population

Question 6

What are the four factors of production?

Answer 6

Capital
Labour
Enterprise
Land

Question 7

Capital

Answer 7

Machinery, equipment and finance needed to produce goods and services.

Question 8

Enterprise

Answer 8

People prepared to take a risk and set up a business

Question 9

Labour

Answer 9

Number of people available to work

Question 10

Land

Answer 10

Natural resources (water,oil,forests,livestock)

Question 11

Opportunity Cost

Answer 11

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

Question 12

Specialisation

Answer 12

When people and businesses concentrate on what they do best so production is more efficient

Question 13

Division of labour

Answer 13

The breaking down of the production process into small parts with each worker allocated to a specific task.

Question 14

Consumer goods

Answer 14

Tangible goods sold to consumers

Question 15

Consumer services

Answer 15

Intangible goods sold to consumers

Question 16

Capital goods

Answer 16

Goods sold to other businesses to help them in their production process

Question 17

Primary sector

Answer 17

Firms whose business involves the extraction of natural resources e.g fishing, farming, mining.

Question 18

Secondary sector

Answer 18

Firms that process and manufacture goods and natural resources and transforms raw materials into finished or partly finished goods e.g manufacturing, refining

Question 19

Tertiary sector

Answer 19

Firms that supply a service to consumers and other businesses e.g shops, banks, cinemas.

Question 20

Industrialisation

Answer 20

The growing importance of the secondary sector and reduced importance of primary sector activities.

Question 21

De-industrialisation

Answer 21

The growing importance of the tertiary sector and released importance of the secondary sector.

Question 22

Public sector

Answer 22

The part of the economy that is controlled by the state of government

Question 23

Private sector

Answer 23

The part of the economy that is owned and controlled by individuals and companies for profit.

Question 24

Mixed economy

Answer 24

An economy where the resources are owned and controlled by both the private and public sectors.

Question 25

Mixed economy

Answer 25

An economy where the resources are owned and controlled by both the private and public sectors.

Question 26

Entrepreneurs:

Answer 26

An individual who has an idea for a business and takes the financial risk of starting and managing a new business.

Question 27

Capital employed

Answer 27

This is the value of all long term finance invested in a business

Question 28

Organic growth (internal)

Answer 28

Increasing the number of goods produced, developing new products or finding new markets.

Question 29

Integration (external):

Answer 29

When a business merges or takes over another business in the same or different industry

Question 30

Horizontal integration

Answer 30

Two firms in the same industry who are also in the same sector merge with one another.

Question 31

Vertical integration

Answer 31

A firm merges or takes over another one in the same industry but different sector.

Question 32

Conglomerate integration:

Answer 32

A firm merges or takes over another firm from a completely different industry.

Question 33

Unlimited liability

Answer 33

Owners of a business are personally liable for the business debts

Question 34

Limited liability

Answer 34

Owners of a business are only liable for the amount they invest.

Question 35

Shareholder

Answer 35

A person or organisation who owns shares in a limited company and is a part-owner of the company

Question 36

Dividends

Answer 36

A payment out of profits, to shareholders as a reward for their investment.

Question 37

Stakeholders

Answer 37

An individual or a group which has an interest in the business because they are affected by its decisions and activities.

Question 38

business objectives

Answer 38

the aims or targets that a business works towards