Term 1

Question 1

What is an example of a shortage?

Answer 1

1. Covid
2. Post brexit

Question 2

Which way does a demand curve shift due to an increase in demand?

Answer 2

Out (right)

Question 3

What is meant by an increase in demand?

Answer 3

The increase in quantity demanded at a given price

Question 4

What factors may cause an increase in demand?

Answer 4

Increase in proportion of income

Question 5

Which way does the demand curve shift when demand decreases?

Answer 5

In (left)

Question 6

what way does the supply line shift when supply decreases?

Answer 6

Goes down (to the left)

Question 7

Which way does the supply curve move when supply increases?

Answer 7

Increases (right)

Question 8

An example of if cost increases, supply falls?

Answer 8

Electricity (supply falls, curve moves to the left)

Question 9

An example of cost falls, supply increases?

Answer 9

Petrol (supply increases, curves move to the right)

Question 10

Impacts on supply? Good and bad

Answer 10

Any type of tax = a decrease in supply

Any type of subsidies (giving Money) = an increase in supply

Question 11

What is the definition of globalisation?

Answer 11

A process by which countries and economies have to become interconnected or the world coming together to trade in each others markets.

Question 12

What are advantages to globalisation?

Answer 12

1. Economies of scale
2. Reduction in monopolies
3. Reduce poverty
4. Risk mitigation

Question 13

What are advantages to organic growth?

Answer 13

1. Low risk
2. Know your market better
3. More controlled, (business control)
4. Maintain their own values.

Question 14

What are disadvantages to organic growth?

Answer 14

1. Long term between investment and return on investment
2. Growth may be limited and dependent on sales forecasts

Question 15

What is a local business? And benefits / disadvantages

Answer 15

Customer service offer (closer to customers)

B - change quickly to customer needs
D - cannot benefit from eos
D- suseptable to competitors (a new competitor may lower their demand)

Question 16

What is a international business? and their benefits / disadvantages

Answer 16

They distribute worldwide but they are based in one country (import and export)

B - manufacturing plants (benefit from eos)
D / B - distribution = vehicles and warehouses ( cost however can distribute further)
B - greater profit potential

Question 17

What is a multinational business?

Answer 17

Where they have manufacturing operation in more than 2 countries and trade worldwide.

Question 18

What are reasons for growth in multinationals?

Answer 18

• emerging economies
  -economies of scale
  -protectionism (taxing imports to protect domestic markets)
  -external growth through takeovers and mergers

Question 19

What are advantages to multinationals?

Answer 19

• increase gdp (add to country through spending, imports and exports)
• increases job market (decreases unemployment)
• increases in competition due to customer choice

Question 20

What are disadvantages to multinationals?

Answer 20

• can go against cultural values, beliefs and morals.

Question 21

What factors affect the size of a business?

Answer 21

• market size
• nature of a product
• ability to access resources for expansion

Question 22

What are reasons for growth in a business?

Answer 22

• economies of scale
• risk mitigation

Question 23

Which factors have facilitated globalisation?

Answer 23

• internet
• e-commerce
• rise of multinationals
• communication technologies

Question 24

What are opportunities of globalisation?

Answer 24

1. New markets possibly with high disposable income
2. Opportunity to move production into countries with lower labour costs
3. Investment opportunity in infrastructure and production (new factories and technology)

Question 25

What are threats of globalisation?

Answer 25

1. Lower labour costs may damage reputation 2. Reduced domestic economies as businesses in developing countries begin to produce by themselves 3. Lack of knowledge / culture differences may threaten global growth

Question 26

What is a brand?

Answer 26

Distinctive product offering created by the use of a logo, symbol etc (McDonald’s logo & Nikes tick)

Question 27

What is a global brand?

Answer 27

Brand that is recognised throughout the world

Question 28

What are challenges of globalisation?

Answer 28

- increases competition - costs of expansion -physical distance -adaption to cultural and customer behaviour

Question 29

Why do people trade internationally?

Answer 29

- variety - specialise - to grow - reduces costs - avoid conflict

Question 30

What is variety?

Answer 30

Trade enables countries to obtain products they cannot make themselves or could only

Question 31

What is growth?

Answer 31

access to millions of new customers creates potential for businesses therefore the economy to grow

Question 32

What is specialisation?

Answer 32

Main advantage of international trade that the company to specialise in e.g. Germans and cars