Unit 1 - Business Activity and influences on business

Question 1

Financial aims or objectives

Answer 1

Survival
Profit
Sales
Market share
Financial security

Question 2

Non-financial aims or objectives

Answer 2

Social objectives
Personal satisfaction
Independence
Control

Question 3

Types of business ownership

Answer 3

Sole trader
Partnership
Limited companies (private/public)
Public corporations

Question 4

Different forms of business organisation

Answer 4

Franchises
Social enterprises
Multinationals

Question 5

Sole trader

Answer 5

A single person who is the exclusive owner of the business.

Question 6

Partnership

Answer 6

When between 2 and 20 people own a business together.

Question 7

Private limited companies (Ltd)

Answer 7

A firm that is privately owned by shareholders.

Question 8

Public limited companies (PLCs)

Answer 8

A company that sells shares on the stock exchange.

Question 9

Public corporations

Answer 9

A business organisation owned and controlled by the state/government.

Question 10

Limited liability

Answer 10

A legal structure in which the assets of the owners are considered to be separate to those of the business. If the business is sued the owners cannot lose their own possessions.

Question 11

Unlimited liability

Answer 11

Where owners are fully responsible for all debts incurred by the business.

Question 12

Which types of business ownership do not have limited liability?

Answer 12

Sole trader
Partnership

Question 13

Franchise

Answer 13

When a franchisor gives permission for its brand name to be used by a franchisee.

Question 14

Social enterprise

Answer 14

A business that aims to improve human or environmental well-being.

Question 15

Not-for-Profit

Answer 15

A business that aims to cover their costs through the products or services they provide.

Question 16

Multinationals

Answer 16

A large business with significant production or service operations in at least two different countries.

Question 17

What do businesses in the primary sector do?

Answer 17

Extract raw materials from the earth.

Question 18

What do businesses in the secondary sector do?

Answer 18

Convert raw materials into finished or semi-finished goods.

Question 19

What do businesses in the tertiary sector do?

Answer 19

Provision of a wide variety of services.

Question 20

Shareholders

Answer 20

A person or organisation that owns shares in a company.

Question 21

Stakeholders

Answer 21

Someone who has an interest in a business’ activity and decision making.

Question 22

Factors influencing business location

Answer 22

Proximity to the market
Proximity to labour
Proximity to materials
Proximity to competition
Nature of business activity
Infrastructure

Question 23

Trade bloc

Answer 23

Group of countries situated in the same region that join together and enjoy trade without barriers.

Question 24

Brownfield sites

Answer 24

Areas of land that were once used for urban development.

Question 25

Greenfield sites

Answer 25

Previously undeveloped areas of land, usually on the outskirts of towns and cities.

Question 26

Assisted areas

Answer 26

Areas that are designated by a government as having economic problems and are targeted to receive support in a variety of forms.

Question 27

Viability studies

Answer 27

Careful study of how a planned activity will work, how much it will cost, and what income it is likely to produce.

Question 28

Globalisation

Answer 28

The business and economic integration of different countries through increasing freedoms in the cross-border movement of people, goods, services, technology and finance.

Question 29

Opportunities of globalisation

Answer 29

Large markets
Economies of scale
Labour
Taxation

Question 30

Threats of globalisation

Answer 30

Increased competition
Increased need to develop a profitable niche
Vulnerability to international takeovers
Greater risk from external shocks

Question 31

Exchange rates

Answer 31

The price of a currency in terms of another.

Question 32

Calculation for exchange rates

Answer 32

Value of currency 1 x Exchange rate = Value of currency 2