Section 1

Question 1

Consumer goods

Answer 1

Physical and tangible goods sold to the public

Question 2

Consumer services

Answer 2

Non-tangible goods or products sold to the public

Question 3

Capital goods

Answer 3

Physical goods used by the industry to aid in the production of other goods and services

Question 4

Creating value

Answer 4

Increasing the difference between the cost of purchasing bought in materials and the price at which finished goods are sold for

Question 5

Added value

Answer 5

The difference between the cost of purchasing bought in goods and the price for which goods are sold for

Question 6

Opportunity cost

Answer 6

The benefit of the next most desired option which is given up

Question 7

Entrepreneur

Answer 7

Someone who takes the financial risk of starting and managing a new venture

Question 8

Social enterprise

Answer 8

Business with many social objectives that reinvest most of its profit into benefiting society rather than maximising returns to owners

Question 9

Triple bottom line

Answer 9

Three objectives of social enterprises : economic, social and environmental

Question 10

Primary sector business activity

Answer 10

Industries of firms that extract natural resources so that they can be processed by other firms

Question 11

Secondary sector business activity

Answer 11

Manufacture and process products from natural resources

Question 12

Tertiary sector business activity

Answer 12

Firms that provide service to consumers and other businesses

Question 13

Public sectors

Answer 13

Organisations accountable to and controlled by a central local government

Question 14

Private sector

Answer 14

Businesses owned and controlled by individuals or group of Individuals

Question 15

Mixed economy

Answer 15

Economic resources are owned and controlled by both government and private individuals – public and private sector

Question 16

Free-market economy

Answer 16

Economic resources are largely owned by the private sector with very little state intervention

Question 17

Command economy

Answer 17

Economic resources owned, planned and controlled by the state

Question 18

Sole trader

Answer 18

Business in which one person provides the permanent finance and in return has full control of the business and keep all the profits

Question 19

Partnership

Answer 19

Business formed by two or more people to carry on a business together with shared capital investment and shared responsibility

Question 20

 Limited liability

Answer 20

The only liability or potential loss a shareholder has if the company fails is the amount invested in a company, not the total wealth of the shareholder

Question 21

Private limited company

Answer 21

A business that is owned by shareholders who are often members of the same family – cannot sell shares to public

Question 22

Public limited company

Answer 22

A business with a legal right to sell shares to the general public – share prices quoted on national stock exchange

Question 23

Shares

Answer 23

Certificate confirmation part ownership of a company and entitling the shareholder owner to dividends and certain shareholder rights

Question 24

Shareholder

Answer 24

A person/institution owning shares in a limited company

Question 25

Memorandum of association

Answer 25

States company name, address of head office through which it can be contacted, maximum share capital for which company seeks authorisation and clear aims of the business

Question 26

Articles of association

Answer 26

The document covers the internal workings and control of the business

Question 27

Franchise

Answer 27

Business uses the same name, logo, trading systems of an existing successful business

Question 28

Joint-venture

Answer 28

Two or more businesses agreed to work closely together on a project and create a separate business Collaboration to do so

Question 29

Public corporation

Answer 29

Business enterprise owned and controlled by the state – nationalised industry

Question 30

Holding company

Answer 30

Business organisations that owns and controls several businesses, but does not unite them into one unified company

Question 31

Capital employed

Answer 31

Total value of all long-term finance invested in the business

Question 32

Market capitalisation

Answer 32

Total value of a companies issued shares Current share price x by total number of shares issued

Question 33

Revenue

Answer 33

Total value of sales made by a business in a period

Question 34

Internal growth

Answer 34

Expansion of the business by means of opening new branches, shops or franchises – organic growth

Question 35

Mission statement

Answer 35

Statement of a businesses aims phrased in a way to motivate employees and stimulate interest by outside groups

Question 36

Corporate social responsibility – CSR

Answer 36

Businesses that consider the interests of society by taking responsibility for the impact of their decisions/activities on consumers, employees, communities and the environment

Question 37

Management by objectives – MBO

Answer 37

Method of coordinating and motivating all staff in an organisation by dividing its overall aim in to specific targets for each department, manager and employee

Question 38

Ethical code – Code of conduct

Answer 38

Document detailing the companies rules and guidelines on staff behaviour that must be followed by all employees

Question 39

Business

Answer 39

Any organisation that uses resources to meet the needs of a customer by providing a product or service they demand

Question 40

Want Good Need Services

Answer 40

Something you would like to have but do you not need in order to live Something you can see touch or smell Something you require in order to survive Something another person does for you

Question 41

Factors of production – CELL

Answer 41

C – capital Equipment and finances; that which is used to utilise the resources E– Enterprise Ability and enthusiasm to combine all factors of production to create a business L – labour Work provided by people or machinery in order to complete a job L – land Everything that occurs naturally and can be seen in nature

Question 42

Industrialisation

Answer 42

The growing importance of the secondary sector manufacturing industries in developing countries The opposite is de-industrialisation

Question 43

Market share

Answer 43

Sales of the business as a proportion of total market share Total business sales Total industry sales X100

Question 44

Objectives

Answer 44

Ensures ability to direct, control and review businesses success