Flipped: Understanding Business Activity

Question 1

a good or service essential for living

Answer 1

need

Question 2

a good or service which people would like to have, but not essential for living

Answer 2

want

Question 3

unlimited wants but limited resources to produce the goods and services to satisfy those wants

Answer 3

economic problem

Question 4

resources needed to produce goods or services (Capital, Enterprise, Land, Labour)

Answer 4

factors of production

Question 5

lack of sufficient products to fulfil the total wants of the population

Answer 5

scarcity

Question 6

the next best item given up by choosing another item

Answer 6

opportunity cost

Question 7

people and businesses focus on what they are good/best at

Answer 7

specialisation

Question 8

production process is split up into different tasks and each worker performs one of these tasks

Answer 8

division of labour

Question 9

combine factors of production to make products (goods and services) which satisfy people’s wants

Answer 9

businesses

Question 10

difference between selling price and cost of brought-in materials and components

Answer 10

added value

Question 11

industries that extracts and uses natural resources from the Earth to produce raw materials used by other businesses

Answer 11

primary sector

Question 12

industries that manufactures goods using raw materials provided by the primary sector

Answer 12

secondary sector

Question 13

industries that provides services to consumers and other sectors of the industry

Answer 13

tertiary sector

Question 14

the decline in the importance of extracting raw materials and increase in the importance of manufacturing goods

Answer 14

industrialisation

Question 15

the decline in importance of the manufacturing sector of the industry and the increase in the importance of providing services to the consumer market

Answer 15

deindustrialisation

Question 16

has both a private sector and a public (state) sector

Answer 16

mixed economy

Question 17

money invested into a business by the owners

Answer 17

capital

Question 18

a person who organises, operates and takes the risk for a new business venture

Answer 18

entrepreneur

Question 19

a written document containing the business objectives and important details about the operations, finance and owners of the new business

Answer 19

business plan

Question 20

the total value of capital used in a business

Answer 20

capital employed

Question 21

when a business expands its existing operations

Answer 21

internal growth

Question 22

when a business takes over or merges with another business

Answer 22

external growth

Question 23

when one business buys out the owners of another business

Answer 23

takeover

Question 24

when the owners of two businesses agree to join their businesses together to make one business

Answer 24

merger

Question 25

when one business merges or takeovers another one in the same industry at the same stage of production

Answer 25

horizontal integration

Question 26

when one business merges or takeovers another one in the same industry at a different stage of production

Answer 26

vertical integration

Question 27

when one business takes over or mergers with a business in a completely different industry

Answer 27

conglomerate integration/diversification

Question 28

a business that is owned by one person

Answer 28

sole trader

Question 29

the owners of the business can be held responsible for the debts of the business they own

Answer 29

unlimited liability

Question 30

the liability of shareholders in a company is limited to only the amount they invested

Answer 30

limited liability

Question 31

can't sell off the business, owners have to reregister

Answer 31

no continuity

Question 32

a form of business in which two or more people agree to jointly own a business

Answer 32

partnership

Question 33

the written and legal agreement between business partners-not essential but recommended

Answer 33

partnership agreement

Question 34

a legally binding document, drawn up by business partners

Answer 34

deed of partnership

Question 35

one that does not have a separate legal identity

Answer 35

unincorporated business

Question 36

businesses owned by shareholders but they cannot sell shares to the public

Answer 36

private limited company (LTD)

Question 37

companies that have separate legal identity from their owners

Answer 37

incorporated business

Question 38

wonders of a limited company- buy shares which represent part-ownership of the company

Answer 38

shareholders

Question 39

businesses owned by shareholders but they can sell shares to the public and their shares are tradable on the Stock Exchange

Answer 39

public limited company (PLC)

Question 40

a legal requirement for all companies- shareholders may attend and vote on. who they want to be on the Board of Directors for the coming year

Answer 40

annual general meeting

Question 41

payments made to shareholders from the profits (after tax) of a company- the return to shareholders for investing in the company

Answer 41

dividends

Question 42

a business based upon the use of the brand names, promotional logos and trading methods pop an existing successful business- franchisee nits the license to operate this business from the franchisor

Answer 42

franchise

Question 43

two or more businesses start a new project together, sharing capital, risks and profits

Answer 43

joint venture

Question 44

a business in the public sector that is owned and controlled by the government

Answer 44

public corporations

Question 45

aims or targets that a business works towards

Answer 45

business objectives

Question 46

total income of a business (revenue) minus total costs -aim for satisfactory level of profits which will avoid owners having to work too many hours or pay too much in tax to the government

Answer 46

profit

Question 47

-pay a return -provide finance

Answer 47

purpose of profit

Question 48

new competitors make a business feel less secure -owners of business may lower prices to survive, even though this would lower the profit on each item sold

Answer 48

survival

Question 49

discourage shareholders from selling shares and helps managers keep their jobs

Answer 49

purpose return to shareholders

Question 50

-increasing profit -increasing share price

Answer 50

how to increase return to shareholders

Question 51

-make jobs more secure if the business is larger -increase the salaries and status of managers as the business expands -open up new possibilities and help to spread the risks of the business by moving into new products and new markets -obtain a higher market share from increase in sales -economies of scales

Answer 51

purpose of growth

Question 52

the percentage of total market sales held by one brand or business

Answer 52

market share

Question 53

-good publicity -increased influence over suppliers 0increased influence over customers

Answer 53

what does increased market share give a business

Question 54

includes social objectives as well as an aim to make profit to reinvest back into the business

Answer 54

social enterprise

Question 55

-working towards higher profit -earning higher returns for shareholders -short-term objective of survival

Answer 55

why do business objectives change

Question 56

any person or group with a direct interest in the performance and activities of a business

Answer 56

stakeholder

Question 57

direct relationship/interest with the company through employment ownership or investment

Answer 57

internal stakeholders

Question 58

indirectly affected by the company's decisions and outcomes

Answer 58

external stakeholders

Question 59

low prices and high quality

Answer 59

what do consumers want

Question 60

good environment and jobs

Answer 60

what do local community want

Question 61

jobs and stability

Answer 61

what do workers want

Question 62

growth of business

Answer 62

what do directors want