Theme 2 Practise Qu's

Question 1

(1)

What is economies of scale?

Answer 1

Increasing OUTPUT whilst cost per unit is LOW.

Question 2

(1)

What is organic/internal growth

Answer 2

Growth of the firm from WITHIN.

Question 3

(1)

What is a public limited company?

Answer 3

A company that sells its shares on the stock market where the PUBLIC can BUY it.

Question 4

(1)

What is a trade bloc?

2024

Answer 4

Regional Free Trade

Question 5

(1)

What is an import?

Answer 5

Bringing something FROM ABROAD.

Question 6

(1)

What is an export?

Answer 6

Selling TO ABROAD.

Question 7

(1)

What is meant by globalisation?

Answer 7

Where a firm is able to locate ACROSS THE WORLD.

Question 8

(1)

What are tariffs?

Answer 8

Taxes on imports.

Question 9

(1)

What is Just In Time?

Answer 9

Running the firm with LITTLE STOCK that new supplies arrive BEFORE running out.

Question 10

(1)

What is quality?

Answer 10

The measure of excellence where a product/service MEETS THE STANDARDS set by CUSTOMERS.

Question 11

(1)

What is productivity?

Answer 11

Measurement of how much EACH WORKER PRODUCES.

Question 12

(1)

What is efficiency?

Answer 12

When a firm uses LESS WASTEAGE on their products.

Question 13

(1)

What is logistics?

Answer 13

How the products will be ORDERED AND DELIVERED ON TIME.

Question 14

(1)

How does an indirect distribution channel work?

Answer 14

Producer –>Wholesaler –> Small Store –> Customer.

Question 15

(1)

What is one method of promotion?

Answer 15

• Advertising
• Sponsorship
• BOGOF

Question 16

(2)

Which two are part of the design mix?

A) Price
B) Function
C) Promotion
D) Cost
E) Quality

Answer 16

B) Function
D) Cost

Question 17

(2)

Which two of the following are documents produced by a business at the start of
the recruitment process?

A) Application form
B) Curriculum vitae (CV)
C) Job autonomy
D) Letter of application
E) Person specification

Answer 17

A) Application Form
E) Person specifcation

Question 18

(2)

Which two of the following are services?

A) Accountancy
B) Biscuits
C) Furniture
D) Hairdressing
E) Shoes

Answer 18

A) Accountancy
D) Hairdressing

Question 19

(2)

Which two of the following are stages of the product life cycle?
A) Birth
B) Cancellation
C) Decline
D) Growth
E) Marketing

Answer 19

C) Decline
D) Growth

Question 20

(2)

Which two of the following are elements of the marketting mix?

A) Cost
B) Function
C) Materials
D) Price
E) Product

Answer 20

D) Price
E) Product

Question 21

(3)

Explain one disadvantage to a business of using a just in time (JIT) system of
stock control.

Answer 21

• Firm not able to buy in BULK.
• JIT system results in FREQUENT, SMALL orders placed for RAW MATERIALS.
• Average VARIABLE COSTS INCREASE.

Question 22

(3)

Explain one advantage to a business of having motivated employees.

Answer 22

• Firm benefits from PRODUCTIVITY.
• Motivated employees = more output PER PRODUCT
• Total Profit Margin RISES.

Question 23

(3)

Explain one impact on a business of using flow production.

Answer 23

• Increase in AUTOMATION.
• More OUPUT of products due to PRODUCTIVITY
• Cost PER UNIT falls.

Question 24

(3)

Explain one reason why a business may decide to reduce the size of its workforce.

Answer 24

• Increase in TECHNOLOGY.
• Able to REPLACE EMPLOYEES.
• Increases PRODUCTIVITY via TECHNOLOGY.

Question 25

# (3) Explain one impact on a business of introducing job rotation.

Answer 25

- Enables FLEXIBILITY. - Employees able to work at different SHIFTS. - Production doesnt HALT even when employees are ABSENT.

Question 26

# (3) Explain one reason why a firm might increase its product range. ## Footnote 2024

Answer 26

- Increases CUSTOMER ATTRACTION. - DIFFERENT products will tailor towards DIFFERENT CUSTOMER NEEDS. - Increases SALES.

Question 27

# (3) Explain one advantage of the firm using (JIT) Stock Control. ## Footnote 2024

Answer 27

- Able to hold LESS STOCK - Doesnt have to incur costs of WAREHOUSING STOCK. - Firm has BETTER NET CASH FLOW.

Question 28

# (3) Explain one impact on a business if tariffs are placed on its imports.

Answer 28

- HIGHER COSTS - Firm has to pay more for their IMPORTS. - Reducing (Net) PROFIT MARGIN of the firm.

Question 29

# (3) Explain one method that a business could use to reduce its environmental impact.

Answer 29

- Reduce amount of PACKAGING used. - Less resources (plastic) are used. - PRESERVES NON - RENEWABLE resources (Oil).

Question 30

# (3) Explain one method that a business could use to extend the life cycle of one of its products.

Answer 30

- REDUCE PRICE on product - Product stands out BETTER VALUE FOR MONEY than rivals' products. - Sales of product should RISE.

Question 31

# (6) Discuss the disadvantages of improving productivity to a firm. ## Footnote 2024

Answer 31

P1: - Higher costs. - Firm may invest in TECH or employee training. - Net Profit decreases --> NPM decreases. P2: - Decreases motivation of employees - Improving Productivity = HIGHER OUTPUT per EMPLOYEE. - Firm could face INCREASING STAFF TURNOVER.

Question 32

# (6) Evaluate the impact of ethical and environmental considerations on a business’s decision-making.

Answer 32

Pros: - Improving reputation. - Act ethically and SUSTAINABLY towards CUSTOMERS. - Increases CUSTOMER LOYALTY. Cons: - Increasing prices - Cost of sustainable raw materials may be HIGH - Customers will less likely purchase because of HIGH PRICES.

Question 33

# (9) A firm has two options: Option 1: Selling assets Option 2: Invest in share capital. ## Footnote 2024

Answer 33

Selling Assets: + Able to raise cash + Selling personal items that they dont need. + Reduced liability - Decreased competitive advantage - Valuable items are sold - Weakens firm's market position. Share Capital: + Large sums of capital raised + No repayment required + Firm maintain POSITIVE NET CASH-FLOW + Attracts INVESTORS + Able to invest with other investors - Hostile takeover - Investors take >= 50% OF TOTAL SHARES - Firm is VULNERABLE to LIABILITY - Firm put under pressure to meet INVESTORS' REQUIREMENTS - INCREASED Profit sharing. - Reduces control of firm.

Question 34

# (3) Explain one method of the Sales Process that will affect the business's survival.

Answer 34

- PRODUCT KNOWLEDGE. - Employees must know WHERE and WHAT the products ARE and ABOUT. - Increases CUSTOMER SATISFACTION.

Question 35

# (3) Explain a drawback of a firm contributing to quality control when making its products.

Answer 35

- Time consuming. - Many DEFECTS are produced. - Product has to be REPRODUCED FROM SCRATCH if NOT meets STANDARDS of CUSTOMERS.

Question 36

# (3) Describe the impact of a firm having a good relationship with its suppliers.

Answer 36

- Improved logistics - The right raw materials obtained from the RIGHT SUPPLIERS ONTIME. - Able to boost customer satisfaction.

Question 37

# (3) Describe the disadvantages of a firm using quality assurance.

Answer 37

- Changes CULTURE OF FIRM - Employees have to check at EVERY STAGE in PRODUCTION LINE - Time consuming.

Question 38

# (5) Outline 5 factors of the Sales Process

Answer 38

- Customer engagement - Product Knowledge - Speed and Efficiency of Service - Customer Feedback - Post - Sales Service.

Question 39

# (3) Explain one impact that a pressure group can have on a business

Answer 39

- May damage BRAND IMAGE of firm - Potential customer may go to ETHICAL brands - Sales of firm will FALL.

Question 40

# (5) State the 5 stages of the Product Life cycle.

Answer 40

1. Introduction 2. Growth 3. Maturity 4. Decline 5. Extension Strategy.

Question 41

Explain an advantage of a firm using a sponsorship to promote its products. ## Footnote 2024

Answer 41

- Gaining customer ATTACTION. - By sponsoring something, the brand will be WIDELY RECOGNISED. - This can lead to improved customer loyalty.