Business in the Real World Flashcards
(24 cards)
Define the term ‘goods’.
Physical items like books.
Describe the difference between needs and wants
Needs - Essential to life
Wants - Desired but can live without
Give an example of a type of business you would find in:
1) Primary sector
2) Secondary sector
3) Tertiary sector
1 - Farming industry
2 - Factories
3 - Shops
What is enterprise?
The process of identifying new business opportunities, and then taking advantage of them.
Why might someone want to become an entrepreneur?
Make profit
What qualities would you expect an entrepreneur to have?
Hardworking, Organised, Innovative
List the four factors of production.
Land, Labour, Capital, Enterprise
Define ‘opportunity cost’.
What’s given up to have or do something else
Define ‘limited liability’.
The owners aren’t liable if something goes wrong so they don’t risk losing their personal possesions
Describe a difference between a PLC and Ltd.
PLC shares are traded on the stock exchange whereas you must be invited to have shares in an Ltd.
What is a not-for-profit organisation?
They don’t try to make profit for the owners.
State two aims a business may have.
Survival, Growth
Describe the difference between aims and objectives.
Objectives are more specific, they’re steps on the way to the aim
What is meant by the term ‘stakeholder’?
A stakeholder is anyone who is affected by a business
List four possible stakeholders in a business?
Owners, Consumers, Competitors, Employees, Suppliers
What is the formula for calculating revenue?
Revenue = Sales x Price
Give an example of a fixed cost.
Rent
State a pro and a con of writing a business plan.
+ Forces owner to think carefully about decisions
- Can be costly and/or time-consuming
List five factors that may affect the location of a business
Cost, Location of the market, Competition, Labour supply, Location of raw materials
Define economies of scale.
A reduction in average unit cost that comes from producing on a large scale
Define diseconomies of scale.
When growth leads to an increase in average unit cost
What is organic growth?
When a business grows by expanding its own activities
What is franchising?
When a company expands by giving other firms the right to sell its products
Describe the difference between takeovers and mergers.
A merge is when two firms join together, a takeover is when a firm buys over half of another firms shares
