understanding business

Question 1

What are the 4 main types of resources used to make product/services?

Answer 1

Capital, Enterprise, Land, Labour

Question 2

What does Capital mean?

Answer 2

The tools, machinery, equipment that a business owns or controls. Also the money the owner has invested into th business.

Question 3

What does Enterprise mean?

Answer 3

the business idea that an entrepreneur has on how to use land, labour and capital in their business.

Question 4

What does Land mean?

Answer 4

The natural resources the business uses

Question 5

What does Labour mean?

Answer 5

The workforce of a business

Question 6

What are the 3 sectors of industry?

Answer 6

Primary, Secondary and Tertiary

Question 7

Explain the primary sector

Answer 7

This sector extracts, they carry out the first stage of production- extracting things from nature. They extract natural resources.

Question 8

Explain the secondary sector

Answer 8

This sector manufactures, they carry out the second stage of production- manufacturing, building and processing. they return the raw materials into finished goods.

Question 9

Explain the tertiary sector

Answer 9

this sector provides services, they sell the finished product to the customer.

Question 10

What are the 3 sectors of economy?

Answer 10

Private sector, Public sector and Voluntary

Question 11

what are the type of business organisations in the private sector?

Answer 11

Sole Trader, Partnership and Private Limited

Question 12

Explain sole trader

Answer 12

Owned and controlled by a single person

Question 13

Advantages of Sole Trader

Answer 13

Easy to set up, Decisions are quick to make, Profits do not need to be shared.

Question 14

Disadvantages of Sole Trader

Answer 14

Finance can be difficult to raise, ill health or holidays etc, can affect business, unlimited liability

Question 15

Explain a partnership

Answer 15

Owned by between 2-20 partners. Controlled by partners who have a say in the running of the businesses.

Question 16

Advantages of a partnership

Answer 16

Affairs can be kept private, Risks spread amongst partners, Partners can specialise in specific roles

Question 17

Disadvantages of a partnership

Answer 17

Unlimited liability, Disagreements can occur, profits must be shared

Question 18

Explain a Private Limited Company

Answer 18

Owned by at least 2 shareholders. Shareholders have to be invited to buy a share in the company. Controlled by an elected board of directors.

Question 19

Advantages of a Private limited Company

Answer 19

Limited liability, ability to sell share so may have access to more capital

Question 20

Disadvantages of a Private limited Company

Answer 20

Shares cannot be sold to the general public on the stock market, Financial information is not completely private, more difficult to set up due to the legal requirements

Question 21

type of business organisation in the public sector?

Answer 21

local authority

Question 22

Explain local authority

Answer 22

Owned and controlled by local government. provide services to benefit their community/general public

Question 23

types of business organisations in the voluntary sector?

Answer 23

charity, local clubs, social enterprises

Question 24

Explain charity

Answer 24

Administered by paid officials and run by volunteers

Question 25

explain local clubs

Answer 25

Administered by paid officials

Question 26

List 5 aims of a business in the private sector

Answer 26

to maximise profits.
to expand/grow.
to survive.
to increase market share.
to provide quality services.

Question 27

List 4 aims of a business in the public sector

Answer 27

to be efficient.
to provide a quality service.
to be cost effective.
to be socially responsible.

Question 28

List 5 aims of a business in the third sector

Answer 28

to maximise donations.
to benefit a community.
to help those in need.
to provide a service that would otherwise not be available to a community /group.
to improve an areas/community/group of people.

Question 29

Name 3 internal stakeholders

Answer 29

Owners.
Shareholders.
Employees.

Question 30

Name 6 external stakeholders

Answer 30

Banks.
Customers.
Suppliers.
Local community.
Pressure Groups.
Government.

Question 31

State the interests of an Owner

Answer 31

Want the business to maximise profits so they continue to receive a return on their investment.

Question 32

State the influences of an owner

Answer 32

They make all the decisions affecting the business

Question 33

State he interests of a Shareholder

Answer 33

They want the business to maximise profits so they continue to receive a dividend from their shares.

Question 34

State the influences of a Shareholder

Answer 34

They vote at meetings to influence the decisions being made

Question 35

State the interests of an Employee

Answer 35

they want a wage or salary from the business.

want good conditions of service from the business.

Question 36

State the influences of an Employee

Answer 36

Can vary the quality of their work.

Can take industrial action if unhappy.