Unit 1 - What is Business?

Question 1

Goods/Inventory

Answer 1

Physical products that are either produced or purchased by a company for the purpose of selling them. (Stock)

Question 2

Services

Answer 2

A service business provides a skilled service, personal labor, or expertise instead of a physical product.

Question 3

Products

Answer 3

A product is an object, or system, or service made available for consumer use as of the consumer demand.

Question 4

Mission statement

Answer 4

A brief statement that outlines an organisation’s purpose, goals, and values.

Question 5

Aims

Answer 5

The long-term strategy for the business.

Question 6

Objectives

Answer 6

A measurable step that a business takes to achieve its aim.

Question 7

Profit

Answer 7

The money you have left after paying for business expenses.

Question 8

Cash-flow

Answer 8

A measurement of the amount of cash that comes into and out of your business in a particular period of time.

Question 9

Stakeholders

Answer 9

Anyone that has an interest in a company and can either affect or be affected by the business.

Question 10

Revenues

Answer 10

The total amount of money received from carrying out the business operations.

Question 11

Fixed costs

Answer 11

Expenses that a company pays that do not change with production levels. e.g Rent

Question 12

Variable costs

Answer 12

Costs that change as the quantity of the good or service that a business produces changes.

Question 13

Total costs

Answer 13

The sum of fixed costs and variable costs.

Question 14

Average costs

Answer 14

The cost per unit manufactured in a production run.

Question 15

Sole trader

Answer 15

A self-employed person who owns and runs their own business as an individual.

Question 16

Unlimited liability

Answer 16

When owners are personally liable for any business debts.

Question 17

Incorporation

Answer 17

The formation and registration of a limited company.

Question 18

Shareholder

Answer 18

Someone that owns at least one share of the companies stock and doesn’t act on the day-to-day business activities.

Question 19

Limited liability

Answer 19

The company is a separate legal entity to its owner or owners so debts won’t affect owners personally.

Question 20

Privatisation

Answer 20

The process of transferring an enterprise or industry from the public sector to the private sector.

Question 21

Market conditions

Answer 21

The characteristics and the situation of a particular market at a particular point of time.

Question 22

Demand

Answer 22

A consumer’s desire to purchase goods and services and willingness to pay a specific price for them.

Question 23

Gross domestic product

Answer 23

Measures the total value of all of the goods made, and services provided, during a specific period of time.

Question 24

Real incomes

Answer 24

Measure the amount of disposable income available to consumers

Question 25

Interest rates

Answer 25

The cost of borrowing money, expressed as a percentage of the amount borrowed.

Question 26

Fair trade

Answer 26

An arrangement designed to help producers in developing countries achieve sustainable and equitable trade relationships.

Question 27

Sustainable production

Answer 27

Where products must be able to be produced and/or consumed it in a way that doesn’t result in harm or destruction.

Question 28

Dividends

Answer 28

The portion of earnings that a company distributes among shareholders each year.

Question 29

Market capitalisation

Answer 29

A system where private individuals and corporations own the means of production

Question 30

Takeover

Answer 30

When one company makes a successful bid to assume control of another.