section 1

Question 1

consumer goods

Answer 1

the physical and tangible goods sold to the general public. They include durable and non-durable consumer goods

Question 2

Define ‘consumer services’

Answer 2

the non-tangible goods sold to the general public

Question 3

define ‘FOPs’

Answer 3

these are the resources needed by the business to produce goods and services.
Land, labour, capital and enterprise

Question 4

define ‘land’

Answer 4

this term includes not only land itself but all the renewable and non-renewable resources of nature

Question 5

define ‘labour’

Answer 5

manual and skilled labour that make up the workforce of the business

Question 6

define ‘capital’

Answer 6

this is the finance needed to set up a business and pay for it continuous operations+also includes the physical goods used by the industry to aid in the production of other goods and services

Question 7

define ‘enterprise’

Answer 7

this is the driving force and provided by risk-taking individuals, that combine other factors of production into a unit capable of producing goods and services.
provides a managing,decision-making and coordinating role

Question 8

define ‘creating value’

Answer 8

increasing the difference between the cost of purchasing bought-in materials and the price the finished goods are sold for

Question 9

define ‘added value’

Answer 9

the difference between the cost of purchasing bought-in material and the price the finished goods are sold for

Question 10

opportunity cost

Answer 10

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

Question 11

entrepreneur

Answer 11

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

Question 12

social enterprise

Answer 12

a business with mainly social objectives that reinvests most of its profits into benefiting society rather than maximising returns to owners

Question 13

triple bottom line

Answer 13

the three objectives of social enterprise ; economic, social,and environmental

Question 14

primary sector business activity

Answer 14

firms engaged in the extraction of natural resources so they can be used and processed by other firms

Question 15

secondary sector business activity

Answer 15

firms that manufacture and process products from natural resources

Question 16

tertiary sector business activity

Answer 16

firms that provide service to consumers and other businesses

Question 17

quaternary sector

Answer 17

economic activity based on intellectual or knowledge-based economy. consists of industries providing information services, such as R&D, computing, consultancy and ICT

Question 18

public sector

Answer 18

comprises of organisations accountable to and controlled by central/local government

Question 19

private sector

Answer 19

comprises of business owned and controlled by individuals or group of individuals

Question 20

mixed economy

Answer 20

economics resources are owned and controlled by both private and public sectors

Question 21

free-market economy

Answer 21

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

Question 22

command economy

Answer 22

economic resources and owned, planned and controlled by state

Question 23

sole trader

Answer 23

a business in which one person provides the permanent finance and in return, has full control of the business and is able to keep all of its profits

Question 24

partnership

Answer 24

a business formed by two or more people to carry on a business together with shared capital investment and usually,shared responsibilities

Question 25

limited liability

Answer 25

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

Question 26

private limited company

Answer 26

a small to medium sized business that is owned by shareholders who are often members of the same family - this company cannot sell shares to the genera; public

Question 27

share

Answer 27

a certificate confirming part ownership of a company and entitling the shareholders to dividends and certain shareholder rights

Question 28

shareholder

Answer 28

a person or institution owning shares in an limited company

Question 29

public limited company

Answer 29

a limited company, often a large business, with a legal right to sell shares to the general public - often listed on stock exchange

Question 30

memorandum of association

Answer 30

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

Question 31

articles of association

Answer 31

this document that covers the internal working and control of the business, such as name of directors and procedures to be followed at meetings will be detailed

Question 32

cooperatives

Answer 32

a cooperative is an autonomous association of people united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled business or is owned and controlled by its members

Question 33

franchise

Answer 33

a business that uses the name, logo and trading systems of an existing, successful business

Question 34

joint venture

Answer 34

two or more businesses agree to work closely together on a particular project and create a separate business division to do so

Question 35

holding company

Answer 35

a business organisation that owns and control a numbers of separate businesses , but does not unite them into one unified company

Question 36

public corporations

Answer 36

a business enterprise owned and controlled by the state a.k.a. nationalised industry

Question 37

revenue

Answer 37

total value of sales made by a business in a given period of time SELLING PRICE x QUANTITY

Question 38

capital employed

Answer 38

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

Question 39

market capitalisation

Answer 39

the total value of a company's issued shares CURRENT SHARE PRICE x TOTAL NO. OF SHARES ISSUED

Question 40

market share

Answer 40

sale of the business as a proportion of total market sales (TOTAL SALES OF BUSINESS/TOTAL SALES OF INDUSTRY) x 100

Question 41

internal growth

Answer 41

expansion of a business by means of opening new branches, shops or factories a.k.a. organic growth

Question 42

external growth

Answer 42

business expansion achieved by means of merging with or taking over another business, from either the same or a different industry.

Question 43

merger

Answer 43

an agreement by shareholders and managers of two businesses to bring both firms together under a common board of directors with *shareholders in both businesses* owning shares in the newly merged business.

Question 44

takeover

Answer 44

when one business buys/acquires another business, often by buying a majority stake in the target business

Question 45

synergy

Answer 45

means that ‘the whole is greater than the sum of parts’, so in integration it is often assumed that the new, larger business will be more successful than the two, formerly separate, businesses were.

Question 46

business objectives

Answer 46

the aims and targets that a business works towards to help it run successfully

Question 47

business strategy

Answer 47

the plan of action that outlines how the organisation will achieve its objectives

Question 48

corporate objectives

Answer 48

are the specific goals set for the business to achieve based on the central aim and mission of the business, but they are expressed in terms that provides much clearer guide for management action or strategy

Question 49

SMART criteria

Answer 49

the most effective business objectives usually meet the smart criteria (Specific, Measurable, Achievable, Realistic and Relevant, Time-specific)

Question 50

mission statement

Answer 50

a statement of the business's core aims, phrased in a way to motivate employees and to stimulate interest by outside groups

Question 51

aims

Answer 51

long term goals that a business hopes to achieve. the core, central purpose of a business's activity is expressed in its corporate aims

Question 52

tactics

Answer 52

specific actions and techniques used to execute the strategy and achieve the objectives

Question 53

corporate social responsibility (CSR)

Answer 53

this concept applies to those businesses that consider the interests of society by taking responsibilities for the impact of their decisions and activities on customers, employees,communities, and the environment

Question 54

ethics

Answer 54

are moral guidelines that influence business decision making

Question 55

ethical code

Answer 55

is a document detailing the rules and guidelines on staff behaviour that must be followed by all employees of an organisation

Question 56

pressure groups

Answer 56

pressure groups are organisations/ groups of people who change business (and government) decisions

Question 57

Management of Objectives

Answer 57

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

Question 58

stakeholders

Answer 58

people or groups of people who can be affected by - and therefore have an interest in - any action by an organisation

Question 59

stakeholder concept

Answer 59

the view that businesses and their managers have responsibilities to a wide range of groups, not just shareholders all stakeholders matter.