Real World

Question 1

What are stakeholders

Answer 1

Someone who is interested by a businesses decisions

Question 2

Factors affecting location

Answer 2

Supplier
Competition
Location of market
Labour supply
Cost

Question 3

What is enterprise

Answer 3

Involves identifying new business opportunities and taking advantage of them. Spotting a gap in the market

Question 4

Characteristics of entrepreneurs

Answer 4

Hard working
Calculated risk
Organised
Innovative

Question 5

Factors of production

Answer 5

Land
Labour
Capital
Enterprise

Question 6

What is opportunity cost

Answer 6

Benefit given up in order to do something else

Question 7

Advantages of sole trader

Answer 7

Easy to set up
Your own boss
You decide what you want to do with profit

Question 8

Disadvantages of sole trade

Answer 8

Long hours and little holiday
Unlimited liability
Unincorporated(business does not have its own legal identity)
Hard to raise profit

Question 9

How many partners can be in a partnership

Answer 9

2-20

Question 10

Advantages of partnerships

Answer 10

More owners-more ideas/range of skills
Share the work
More capital

Question 11

Disadvantages of partnership

Answer 11

Legally responsible for other partners descions
Unlimited liabillity
Decreased income

Question 12

What are the two types of companies

Answer 12

Private
Public

Question 13

Private company advantages

Answer 13

Limited liabillity
Easier to get loans or mortgage
Owners keep control

Question 14

Private company disadvantage

Answer 14

More expensive
Legally obliged to publish account

Question 15

PLC(public) advantages

Answer 15

Much more capital
Helps company expand and diversify
Limited liabillity

Question 16

PLC(public) disadvantages

Answer 16

Hard to agree on decisions(a lot of shareholders)
Easy for individuals to buy all shares
More shareholders-less profit per person

Question 17

Examples of not for profit organisation

Answer 17

Help community
Charity
Fund projects

Question 18

Why do businesses use aims and objectives

Answer 18

Monitor success

Question 19

Examples of stakeholders

Answer 19

Local community
Employees
Customers
Governments

Question 20

What is revenue

Answer 20

Income earned by a business

Question 21

Equation for revenue

Answer 21

Revenue=sales x price

Question 22

What are fixed cost and examples

Answer 22

They don’t vary with outcome
Insurance
Fixed salaries

Question 23

What are variable cost

Answer 23

Will increase if a fir expands output

Question 24

How to calculate total cost

Answer 24

Total cost=variable cost+fixed cost

Question 25

Average unit cost

Answer 25

How much each products costs to make

Question 26

Average unit cost equation

Answer 26

Average unit cost=total cost divide output

Question 27

How to calculate profit

Answer 27

Profit=revenue-costs

Question 28

What are the 7 sections of a business plan

Answer 28

Personal details Mission statement Objectives Product description Product details Staffing requirements Finance

Question 29

Drawback of a business plan

Answer 29

Cost time and have a cost

Question 30

What is economies of scale

Answer 30

Buys from supplier in bulk to get a cheaper unit price

Question 31

Diseconomies of scale

Answer 31

Where are areas grown can lead to increases in average unit cost

Question 32

Internal expansion

Answer 32

When a business grows by expanding it’s own activities

Question 33

Internal expansion description

Answer 33

Low risk but slow

Question 34

E-commerce

Answer 34

Act of buying and selling goods online

Question 35

M-commerce

Answer 35

Act of buying and selling goods on handheld devices

Question 36

Outsourcing

Answer 36

Paying other firms to carry out tasks it could do itself

Question 37

Franchising

Answer 37

Where a company expands by giving other firms the right to sell its product(or use it’s trademark)

Question 38

Benefits of franchising

Answer 38

Increases market share Increases brand awareness

Question 39

External expansion

Answer 39

Using other businesses to expand

Question 40

Examples of external expansion

Answer 40

Merger Take over

Question 41

What is a merger

Answer 41

Two firms that join together to form a new larger firm

Question 42

What is a take over

Answer 42

Existing firm expands by buying more than half the shares in the other firm

Question 43

What is a social enterprise

Answer 43

A business that is set up to help society rather than make a profit

Question 44

What is a gap in the market

Answer 44

When a group of consumers have a need for a new product that is not being supplied by existing business

Question 45

What are the four factor of production(CELL)

Answer 45

Capital Enterprise Land Labour

Question 46

What is opportunity cost

Answer 46

What is given up as a consequence of a particular decision of choice

Question 47

What is the primary sector and examples

Answer 47

The first stage of production, examples include agriculture, forestry, mining.

Question 48

What is the secondary sector and examples

Answer 48

Converts resources from the primary sector into products, examples include car manufacturing, construction

Question 49

What is the tertiary sector and examples

Answer 49

Comprises businesses that supplies services, examples include education and health care.

Question 50

What are characteristics of entrepreneurs

Answer 50

Willingness to take risks Hardworking and committed Innovative Organised

Question 51

What is interest rate

Answer 51

The cost of borrowing money or the reward for saving money, expressed a percentage

Question 52

What is exchange rate

Answer 52

The price of one currency expressed in terms of another, for example £1 - $1.50

Question 53

What are the 4 functions of a business

Answer 53

Operations-involves producing a good or service Marketing-a business will succeed if it understands what it’s customers want and supplies these products Human Resources-all businesses employ people so they have to be managed Finance-business depend on money so they have to raise it to function

Question 54

What is globalisation

Answer 54

The trend for markets to become worldwide in scope

Question 55

What is a business plan

Answer 55

A document setting out what a business does and what it hopes to achieve in the future

Question 56

What are the advantages of business planning

Answer 56

It offers opportunities for planners to think analytically about their business using data that has been gathered for this purpose It can help to persuade stakeholders(such as potential investors)that the business has been thought through and should succeed It includes targets by which the business’s progress can be monitored. This helps managers to make good-quality decisions at the right times