Unit 1

Question 1

Scarcity

Answer 1

Very little of something

Question 2

Opportunity Cost

Answer 2

The cost of the next best alternative given up

Question 3

Specialisation

Answer 3

When someone words in a specific place in a job

Question 4

Importing

Answer 4

Coming into the country

Question 5

Exporting

Answer 5

Going out of the country

Question 6

Public sector

Answer 6

The part of the economy that is controlled by the state or the government

Question 7

Private sector

Answer 7

The part of the economy that is owned and controlled by individuals and companies for profit

Question 8

Primary research

Answer 8

The gathering of new information specific to the needs of a business EG Questionnaires

Question 9

Secondary research

Answer 9

The use of data that is already in existence Eg. Commercial reports and government data

Question 10

Mixed economy

Answer 10

An economy where there resources are owned and controlled by both the private and the public sectors

Question 11

Interdependence

Answer 11

Describes how every sector of the economy relies on other sectors

Question 12

Business Plan

Answer 12

A detailed written document outlining the purpose and aims of a business which is often used to persuade lenders or investors to finance a busines proposal

Question 13

Sole trader

Answer 13

A business that is owned and controlled by 1 person

Question 14

Partnership

Answer 14

A business formed by 2 or more people who will usually share responsibility for day to day running of the business

Question 15

Joint venture

Answer 15

2 more more businesses agree to work together on a project and set up a separate business for this purpose

Question 16

Franchise

Answer 16

A business system where entrepreneurs buy the right to use the name, logo and product of an existing business

Question 17

Limited companies

Answer 17

The shareholders in a limited liability company which fails to only risk losing the amount they invested in the company

Question 18

Private limited companies

Answer 18

Does not publicly trade shares

Question 19

Public limited company

Answer 19

Legally allowed to sell its shares to the public

Question 20

Unincorporated business

Answer 20

This describes a type of business where the owner and the business are legally the same. So, if the business owes money, the owner is personally responsible for paying it back – even if it means using their own money or selling their personal belongings.

Question 21

Business activity

Answer 21

The process of producing goods and services to satisfy consumer demands

Question 22

Need

Answer 22

A good or service which is essential to living

Question 23

Want

Answer 23

A good or service which people would like, but is not essential for living

Question 24

Economic problem

Answer 24

Unlimited wants cannot be met because there are limited factors of production. This increase scarcity

Question 25

Factors of production

Answer 25

The resources needed to produce goods and services, Land, Labour, capital and enterprise

Question 26

Division of labour

Answer 26

Production is divided into separate tasks and each employee does just one of those tasks

Question 27

Consumer goods

Answer 27

Products which are sold to the final consumer. They can be seen and touched, for example computers and food

Question 28

Consumer Services

Answer 28

Non-tangible products such as insurance services, transport

Question 29

Capital Goods

Answer 29

Physical goods, such as machinery and delivery vehicles, used by other businesses to help produce other goods and services

Question 30

Tertiary Sector

Answer 30

Firms that supply a service to consumers and other businesses

Question 31

Chain of production

Answer 31

The production and supply of goods to the final consumer involves activities from primary, secondary and tertiary sector businesses

Question 32

Entrepreneur

Answer 32

An individual who has an idea for a new business and takes the financial risk of starting up and managing it

Question 33

Revenue

Answer 33

The amount a business earns from the sale of its products

Question 34

Business Start-up

Answer 34

A newly formed business. They usually start small, but some might grow to become much bigger

Question 35

Start up capital

Answer 35

The finance needed when first setting up a business.

Question 36

Ordinary shareholders

Answer 36

The owners of a limited company

Question 37

Dividend

Answer 37

A payment, out of profits, to shareholders as a reward for their investment

Question 38

Collateral

Answer 38

Non current assets offered as security against borrowing

Question 39

Public corporation

Answer 39

A business organisation that is owned and controlled by the state

Question 40

Objective

Answer 40

A statement of a specific target to be achieved. It should be SMART

Question 41

Market Share

Answer 41

The revenue of a business expressed as a percentage of total market revenue

Question 42

Corporate Social responsibility

Answer 42

Businesses taking responsibility for the impact their activities might have on society and the enviroment

Question 43

Pressure Group

Answer 43

A group of like-minded people that puts pressure on businesses and government to change their policies to reach a predetermined objective

Question 44

Social enterprise

Answer 44

A business with social objectives that reinvests most of its profits back into the business or into benefiting society at large

Question 45

Stakeholder

Answer 45

An individual or group which has an interest in a business because they are affected by its activities and decisions