What Is A Business

Question 0

Good and services require…

Answer 0

Resources

Question 1

What is a business?

Answer 1

Organisation that…

• makes as much profit as poss.
• produces goods/services
• where ideas are developed into products/services
• something gov. Encourages because provides jobs

Question 2

Factors of production:
C
E
L
L

Answer 2

Capital-finance/tools of produc.
Entrepreneurship-idea, a person with ability to take risks
Labour- workers- human input
Land- natural resources like oil. Also physical space needed

Question 3

Define a good

Answer 3

• tangible product
• CONSUMER DURABLE GOODS- used several times, high value e.g fridges
• SINGLE USE- none durable, used in single act e.g food

Question 4

Define services

Answer 4

-intangible
-include accounting,banking,cleaning
-COMMERCIAL- provide by industry like transport
PERSONAL- fitness trainer

Question 5

List 4 aims of a business

Answer 5

• gain market share
• increase sales
• make profit
• to survive

Question 6

Main aims of small business

Answer 6

Survive

Break even

Question 7

Aims of large business

Answer 7

Gain market share
Gain new customers
Positive public image

Question 8

Aims should be SMART

Answer 8

Specific
Measurable
Achievable 
Realistic
Time bound

Question 9

Aims of small sole trader

Answer 9

Survive each year
Breaks even
Maybe good employee/ good rep.

Question 10

Objectives of private enterprises

Answer 10

Owners by non gov. Organisations

• profit maximisation
• maximise wealth of shareholders
• growth
• fulfil needs+wants of people

Question 11

Objectives of public enterprises

Answer 11

Government organisation 
-provide basic infrastructure 
-distribute goods/services at reasonable price
-employment opportunities
Non profit

Question 12

What is a need?

Answer 12

Necessity for life that helps you survive

E.g food, water clothes

Question 13

What is a want?

Answer 13

Our desire for certain things
Non essential
E,g cars electronics holidays

Question 14

Problem with wants

Answer 14

Our wants are infinite, however resources and finite meaning that we have to make a choice

Question 15

Define scarcity

Answer 15

Our wants are infinite, however resources are scarce meaning that consumers have to make a choice which leaves an opportunity cost

Question 16

What is an opportunity cost?

Answer 16

It is the value of the next best alternative forgone when making a choice

Question 17

What is globalisation?

Answer 17

Movement towards economic and social ties between countries through spread of business and trade. Capitalist theory that the world is “shrinking” as it is easier to share and communicate

Question 18

Globalisation means

Answer 18

Economies now rely on each other. Now opportunity to buy and sell all over the world and be located anywhere

Question 19

Globalisation is made possible by

Answer 19

Technology 
Internet
Communication networks
Collapse of communist 
Movement of free trade

Question 20

What are some benefits of globalisation

Answer 20

Increased choices
Greater potential to grow
Economies of scale
More employment opportunities

Question 21

What are some disadvantages of globalisation?

Answer 21

Larger gap between rich and poor
Domination of rich firms
Poor have less opportunities to get into markets
Exploitation of workers

Question 22

What is a multinational firm?

Answer 22

A firm operating in a number of countries whether producing, retailing or a combination

Question 23

Multinationals have…

Answer 23

Huge amount of power
Many factories in less developed countries
Influence over legislation+taxation

Question 24

List 4 advantages of multinationals

Answer 24

Provide employment
Investment leads to improved infrastructure
Pay taxes to gov.
Increase consumer choice

Question 25

Disadvantages of multinationals

Answer 25

Negative environmental impacts
Jobs can be low paid/low skilled
Resource depletion
Small firms go out of business

Question 26

Benefits to multinationals

Answer 26

Lower labour costs (LEDC)
Avoid taxes and tariffs
Governments sometimes host no. Of incentives

Question 27

Problems to multinationals

Answer 27

Communication prob.
Geographical communication
Lack of skilled work force.