Understanding Business

Question 1

What is a good?

Answer 1

Goods are tangible.

Question 2

What is a service?

Answer 2

Services are intangible.

Question 3

What are durable goods?

Answer 3

Goods that last for a long period of time.

Question 4

What are non-durable goods?

Answer 4

Goods that DO NOT last for a long period of time.

Question 5

What is a consumer?

Answer 5

Goods and services consumed by individual private people.

Question 6

What is capital?

Answer 6

Goods and services consumed by BUSINESSES.

Question 7

What is a need?

Answer 7

Needs are the basic requirements for survival.

Question 8

What is a want?

Answer 8

Wants are required to make life pleasant and are non-essential items.

Question 9

How do you create wealth?

Answer 9

By adding value to each stage of the production process.

Question 10

What is an entrepreneur?

Answer 10

Someone who has a business idea and develops it in order to produce a good or provide a service.

Question 11

What are the factors of production?

Answer 11

C - Capital
E - Enterprise
L - Land
L - Labour

Question 12

What are the 3 sectors of industry?

Answer 12

Primary
Secondary
Tertiary

Question 13

What are the 3 sectors of economy?

Answer 13

Private
Public
Third

Question 14

What are the three types of businesses in the private sector?

Answer 14

Sole Trader
Partnership
Private Limited Company

Question 15

What is a Sole Trader?

Answer 15

A business owned by one person.

Question 16

What is a partnership?

Answer 16

A business association between 2-20 members.

Question 17

What is a Private Limited Company?

Answer 17

A group of people who come together to set up a business.

Question 18

What are the 3 types of organisation in the third sector?

Answer 18

Charity
Local Clubs
Social Enterprises

Question 19

What is a franchise?

Answer 19

A franchise allows a trader to use a well-known company’s trade name.

Question 20

What are the aims of a business in the private sector?

Answer 20

• Maximise profits
• Expand/grow
• survive
• Increase market share
• Social responsibilty
• Customer satisfaction
• Quality services

Question 21

What are the aims of a business in the public sector?

Answer 21

• Efficient
• Quality service
• Cost effective
• Social responsibility

Question 22

What are the aims of a business in the third sector?

Answer 22

• Maximise donations
• Benefit a community
• Help those in need
• Provide alternative services
• Improve an area

Question 23

What is a stakeholder?

Answer 23

A person or group of people who have an interest in the success of a business.

Question 24

What is an interest?

Answer 24

What they want from the business.

Question 25

What is an influence?

Answer 25

An action that will impact on what the business does.

Question 26

What are the 3 internal stakeholders?

Answer 26

Owners Shareholders Employess

Question 27

What are the 6 external stakeholders?

Answer 27

``` Banks Customers Suppliers Local Community Pressure Groups Government ```

Question 28

What are the 3 internal factors?

Answer 28

Finance Human Resources Technology

Question 29

What are the external factors?

Answer 29

``` P - Political E - Economic S - Social T - Technology E - Environmental C - Competitive ```