Paper1

Question 1

What is the purpose of a business?

Answer 1

To produce goods or services to satisfy customer needs and wants.

Question 2

Name the three sectors of industry.

Answer 2

Primary, Secondary, Tertiary.

Question 3

Give one example of a stakeholder.

Answer 3

Owners, employees, customers, suppliers, government.

Question 4

What is a business plan?

Answer 4

A document outlining a business’s objectives and how it plans to achieve them.

Question 5

What is globalisation?

Answer 5

The process by which businesses operate on an international scale.

Question 6

Name one ethical issue that might affect a business.

Answer 6

Fair trade, working conditions, sustainability.

Question 7

What is the impact of legislation on businesses?

Answer 7

It ensures fair treatment of workers and compliance with laws.

Question 8

How does technology affect business?

Answer 8

Improves efficiency, allows e-commerce, and may reduce labour needs.

Question 9

Name three methods of production.

Answer 9

Job, Batch, Flow.

Question 10

What is JIT?

Answer 10

Just-In-Time: ordering stock only when needed.

Question 11

Define procurement.

Answer 11

The process of finding and buying goods and services for a business.

Question 12

Why is customer service important?

Answer 12

Improves reputation, increases customer loyalty and repeat sales.

Question 13

What is the difference between flat and tall structures?

Answer 13

Flat has fewer management layers; tall has more.

Question 14

What is internal recruitment?

Answer 14

Hiring someone who already works for the business.

Question 15

Name two types of training.

Answer 15

On-the-job and off-the-job training.

Question 16

What is one financial method of motivation?

Answer 16

Pay, bonus, commission.

Question 17

How do you answer a 6 mark question?

Answer 17

Make points, explain them, and use context/examples.

Question 18

What does a 9 mark answer need?

Answer 18

Balanced argument, use of case study, conclusion.

Question 19

Formula for Revenue?

Answer 19

Revenue = Price × Quantity

Question 20

Formula for Profit?

Answer 20

Profit = Revenue − Costs

Question 21

Formula for Market Share?

Answer 21

Market Share = (Sales / Total Market Sales) × 100

Question 22

Formula for Average Cost?

Answer 22

Average Cost = Total Cost / Output

Question 23

What is a stakeholder?

Answer 23

Anyone affected by or with an interest in a business.

Question 24

Define motivation.

Answer 24

The reason why employees want to work hard and do well.

Question 25

What is market share?

Answer 25

The proportion of sales a business has in the total market.

Question 26

What is batch production?

Answer 26

Producing a set number of identical products before switching.

Question 27

What is an entrepreneur?

Answer 27

A person who takes the risk of starting and running a business.

Question 28

Define sole trader.

Answer 28

A business owned and run by one person with unlimited liability.

Question 29

Define partnership.

Answer 29

A business owned by two or more people sharing profits and responsibilities.

Question 30

What is a private limited company (Ltd)?

Answer 30

A company with limited liability whose shares are not sold to the public.

Question 31

What is a public limited company (Plc)?

Answer 31

A company whose shares are traded on the stock exchange.

Question 32

Define unlimited liability.

Answer 32

The owner is personally responsible for all business debts.

Question 33

Define limited liability.

Answer 33

The owner's losses are limited to their investment.

Question 34

What are business aims and objectives?

Answer 34

Goals a business wants to achieve, e.g., survival, profit, growth.

Question 35

What is a franchise?

Answer 35

A business that uses the name, logo, and products of an existing brand.

Question 36

What is automation?

Answer 36

Using machines and technology to do tasks previously done by humans.

Question 37

What is environmental sustainability?

Answer 37

Minimizing negative impact on the environment and conserving resources.

Question 38

What is inflation?

Answer 38

The rate at which prices increase over time.

Question 39

What is interest rate?

Answer 39

The cost of borrowing money or reward for saving.

Question 40

What is exchange rate?

Answer 40

The value of one currency in terms of another.

Question 41

What is a boom?

Answer 41

A period of high economic growth.

Question 42

What is a recession?

Answer 42

A period of economic decline with reduced trade and industrial activity.

Question 43

Define legislation.

Answer 43

Laws made by the government that businesses must follow.

Question 44

What is the Equality Act?

Answer 44

Law ensuring fair treatment in employment regardless of personal traits.

Question 45

What is quality assurance?

Answer 45

Ensuring quality standards are met throughout production.

Question 46

What is quality control?

Answer 46

Inspecting products at the end of production to ensure standards.

Question 47

What is customer engagement?

Answer 47

Interacting with customers to build a relationship and loyalty.

Question 48

What is e-commerce?

Answer 48

Buying and selling goods and services online.

Question 49

What is logistics?

Answer 49

The management of the flow of goods from supplier to customer.

Question 50

What is a supply chain?

Answer 50

All stages involved in getting a product from raw material to customer.

Question 51

What is stock control?

Answer 51

Managing inventory levels to meet demand without excess.

Question 52

What is a job description?

Answer 52

A document describing the duties and responsibilities of a job.

Question 53

What is a person specification?

Answer 53

A document outlining the qualifications and skills needed for a job.

Question 54

What is induction training?

Answer 54

Training given to new employees when they start a job.

Question 55

What is performance appraisal?

Answer 55

Evaluating an employee’s job performance over time.

Question 56

What is a contract of employment?

Answer 56

A legal agreement between employer and employee.

Question 57

What is hierarchy?

Answer 57

The levels of authority in a business organisation.

Question 58

What is delegation?

Answer 58

Giving responsibility for tasks to someone lower down in the hierarchy.

Question 59

What is a span of control?

Answer 59

The number of employees a manager is directly responsible for.

Question 60

What is retention?

Answer 60

Keeping employees in the business over time.

Question 61

What is net profit?

Answer 61

Profit after all expenses, including taxes, have been deducted.

Question 62

What is gross profit?

Answer 62

Revenue minus cost of sales (not including other expenses).

Question 63

Define overheads.

Answer 63

General costs not directly linked to production (e.g. rent, utilities).

Question 64

What is break-even?

Answer 64

The point at which revenue equals total costs, meaning no profit or loss.

Question 65

Formula for Break-even Output?

Answer 65

Fixed Costs ÷ (Selling Price - Variable Cost per Unit)

Question 66

Define fixed costs.

Answer 66

Costs that do not change with output, e.g., rent.

Question 67

Define variable costs.

Answer 67

Costs that change depending on output, e.g., raw materials.

Question 68

What is margin of safety?

Answer 68

The difference between actual output and break-even output.

Question 69

What is a cash flow forecast?

Answer 69

A prediction of money inflows and outflows over time.

Question 70

What is working capital?

Answer 70

Current assets minus current liabilities, shows liquidity.

Question 71

What is business growth?

Answer 71

Expansion of a business to increase output, revenue or market share.

Question 72

Define organic growth.

Answer 72

Internal expansion through increased sales or new products.

Question 73

Define external growth.

Answer 73

Expansion by joining with other businesses (merger or takeover).