paper 1

• What are the two main categories of economic offerings?

  Goods and services
• What is the difference between goods and services?

  Goods are tangible, while services are intangible
• What are examples of needs?

  Shelter, food, and water
• What are examples of wants?

  Everything beyond basic needs
• What are the factors of production?

  Land, labor, capital, and enterprise
• What does opportunity cost refer to?

  The value of what you sacrifice when making a decision
• What are the three business sectors?

  Primary, secondary, and tertiary
• What is included in the secondary sector?

  Construction and manufacturing
• Give an example of a tertiary service.

  A hairdresser
• What are some characteristics of an entrepreneur?

  Hardworking, innovative, organized, and willing to take risks
• What are some objectives of an entrepreneur?

  To be their own boss, flexible working hours, or earn more money
• What does dynamic change refer to in business?

  Constant change happening outside the business's control
• What does Telly stand for in the context of dynamic change?

  Technology, environment, legislation, and economy
• What are the forms of business ownership?

  Sole traders, partnerships, private limited companies, and public limited companies
• What is a disadvantage of sole traders and partnerships?

  They have unlimited liability
• What is the advantage of private and public limited companies?

  They have limited liability
• What does profit distribution refer to in public limited companies?

  Dividends paid to shareholders
• What is a key advantage of public limited companies?

  Access to enormous finance
• What is the divorce of ownership and control in public limited companies?

  Managers operate the business while owners are shareholders
• How can a business access additional sources of finance?

  By selling shares
• What are some common business objectives?

  Profit maximization, survival, and market share growth
• How do business objectives evolve over time?

  They may shift from survival to profit maximization
• What are stakeholders in a business context?

  Anyone with an interest in the business
• What might be a conflict between stakeholders?

  Shareholders wanting higher dividends at the expense of employee pay raises
• What factors influence business location?

  Proximity to market, availability of raw materials, and labor access
• What are fixed costs?

  Costs that do not change with output
• What are variable costs?

  Costs that vary with output
• What is the formula for total cost?

  Total cost = Fixed costs + Variable costs
• What is the purpose of creating business plans?

  To raise finance, set objectives, and organize functional areas
• What are some issues with business plans?

  They can be time-consuming and expensive to create
• What are the two methods of business growth?

  Internal (organic) growth and external (inorganic) growth
• What is an example of internal growth?

  Franchising, outsourcing, or opening new stores
• What is an example of external growth?

  Takeovers and mergers
• What are economies of scale?

  Cost advantages gained by increasing production
• What are purchasing economies of scale?

  Cost savings from buying in bulk
• What are technical economies of scale?

  Cost savings from improved technology and efficiency
• What happens if a business grows too rapidly?

  It may lead to diseconomies of scale
• What is the impact of technology on business communication?

  It enables digital communication through various platforms
• What are some environmental considerations for businesses?

  Traffic congestion, recycling, waste disposal, and pollution
• What are the three types of legislation businesses should be aware of?

  Employment law, health and safety law, and consumer law