component 1 defintions business oportunities

Question 1

unlimited liability

Answer 1

situation where the owners of a business are personally resposible for all the debts and liablities of the business and if the business cant pay its debts the owners personal assets may be used to cover the debts

Question 2

limited liability

Answer 2

where owners or shareholders of a company arent personally responsible for the companys debts and liabilities therefore personal belongings will not get repossesed if debts cant be paid

Question 3

cooperatives

Answer 3

organisations that are owned and operated by a group of indivduals who come together to meet a common need or goal.

Question 4

societies

Answer 4

a group of people who come together to start a club/ gorup sharing the same interests and not for benefits or profits

Question 5

fixed costs

Answer 5

costs that do not vary with output no matter how much is sold fixed costs have to be paid for example rent, insurance tax

Question 6

variable costs

Answer 6

vary in direct proportion to output, as output increases variable costs increase and vise versa for example raw materials and labour

Question 7

semi variable costs

Answer 7

costs that contain both fixed and variable elements

Question 8

direct costs

Answer 8

costs that arrise specifically from the produvtion of s product or provision of a service for example rent on a shop, materials, direct labour

Question 9

overhead costs/ indirect costs

Answer 9

costs not directly related to the production of a specific product or service- rent, utliities

Question 10

break even

Answer 10

point where a business makes neither a profit or incures a loss where total revenue = total costs

Question 11

contribution

Answer 11

the difference between the selling price per unit and the variable cost per unit

Question 12

margin of safety

Answer 12

difference between output level and break even output when output is above break even, thee amount by which demand can fall before a business incures losses.

Question 13

demand

Answer 13

quantity off a good or service consumers are willing and able to purchace at a given price within a specific period of time

Question 14

supply

Answer 14

quantity of a good or service that a producer is willing and able to supply at a given price during a given period of time

Question 15

working capital

Answer 15

money needed to finance the day to say running of a business, allows stock to be bought and wages and bills to be paid.

Question 16

investment capital

Answer 16

helps the business grow. funds businesses allocate for investment purposes

Question 17

capital expenditure

Answer 17

money to invest in fixed assets such as buildings and equipment

Question 18

market research

Answer 18

processs of collecting information about a businesses customers, the market place and the activities of competitors within the market place for exmaple quantitive and qualititve data

Question 19

primary research

Answer 19

field research, gathers first hand information directly relevant to the needs of a business for example, questionaires and focus groups

Question 20

secondary research

Answer 20

information not gathered specifically for the business but adapted for use, easily avaliable, for exmaple: official publications and online desk research

Question 21

sample

Answer 21

a group of respondants to a market research exercise who are selected to be representitive of the views of a target market as a whole

Question 22

random sampling

Answer 22

every member of the population has an equal chance of being chosen

Question 23

quota sampling

Answer 23

population is segmented into a number of groups that share the same characteristics

Question 24

market segmentation

Answer 24

a process of breaking down a market into sub- groups known as segmants that share similar characteristics for exmaple, income level, lifestyle and location

Question 25

business plan

Answer 25

a statement that outlines the way in which a business will attempt to achieve its objectives a clear ide of operation and direction

Question 26

market orientated

Answer 26

responding to competitive pressure and understanding market in which a business is operating in and monitoring competitors activities

Question 27

equilibrium price

Answer 27

In a free market, demand and supply equal the equilibrium price this is where the quantity demanded is equal to quantity supplied

Question 28

Demand

Answer 28

The amount of product consumers are willing and able to purchase at a given price

Question 29

Supply

Answer 29

The quantity of a product that suppliers are willing and able to supply at a given price

Question 30

market

Answer 30

a meeting place between buyers and sellers where goods and services are exchanged usually for money

Question 31

enterprise

Answer 31

a company or organisation involved in commercial actitvities

Question 32

competition

Answer 32

rivalry between organisations operating in the same market

Question 33

sme’s

Answer 33

small and medium enterprises, fewer employees and lower revenue ( add stats)

Question 34

costs

Answer 34

expenses incurred by a business or indivifual in the process of producing goods or providing a service

Question 35

reveunue

Answer 35

total amount of money that a business or organisation earns from its primary activities such as sales.
income generatef before deducting expenses tax and costs

Question 36

profits

Answer 36

financial gains or earnings a business generates from their operations/investments

Question 37

contribution