Section 1 - Business in the real word

• What do business provide?

  Goods and services to satisfy their customers wants and needs.
• What are the four factors of production?

  Capital, enterprise, land and labour (CELL as an abbreviation).
• What is capital?

  The Investment in equipment required to run a business, such as factories and machinery.
• What is land?

  The physical site in which a business is based and the natural resources required.
• What is labour?

  The skills available and number of workers employed by a business.
• What is an enterprise?

  The skills of the people involved in business to identify business opportunities & bring resources together
• What is opportunity cost?

  The cost of making one choice concerning the use of limited resources at the expense of an alternative choice.
• What is a primary industry? Give a few examples.

  A business that extracts the earth's natural resources

  -mining

  -fishing

  -farming and agriculture
• What is a secondary industry? Give a few examples.

  A business that uses raw materials to manufacture

  goods or construct items.

  -construction

  -food processing

  -car manufacturing
• What is the tertiary industry? Give a few examples.

  A business that provides services to consumers or other businesses

  -banking

  -healthcare

  -hairdressing

  -delivery companies

  -restaurants
• What the chain of production?

  The stages that a product goes through to be ready to be sold to customers
• What is interdependency?

  Businesses in a chain of production rely on one another.
• What is deindustrialisation?

  Where there is a decline in manufacturing in a country and an increase in tertiary businesses.
• What is a business environment?

  All the factors outside of a business that can affect it.
• What is an entrepreneur?

  A person who has the vision to use initiative to make

  business ideas happen, managing the resources and risks.
• What are the advantages of being a sole trader?

  • they’re easy to set up, which means they’re great for start-up businesses
  • You get to be your own boss
  • You alone decide what happens to any profit
• What is a disadvantage of being a sole trader?

  • you might have to work long hours and may not get many holidays.
• What is a disadvantage of being a sole trader?

  • You have unlimited liability. This means that if the business goes bust, you are liable for paying back all of the debt - which might mean you have to sell every thing you own.
• What is a disadvantage of being a sole trader?

  • It can be hard to raise money. Banks see sole traders as risky, so it may be hard to get a loan. You often have to rely on your own savings, or family and friends.
• What is an advantage of a partnership?

  • More owners mean more ideas, and a greater range of skills and expertise
• What is an advantage of a partnership?

  • It means more people to share the work
• What is an advantage of a partnership?

  More owners means more capital can be invested into the business, so it can grown faster.
• What is a disadvantage of a partnership?

  Each partner is legally responsible for what all the other partners do
• What is a disadvantage of a partnership?

  Like sole traders, partnerships have unlimited liability
• What is a disadvantage of a partnership?

  More owners means more disagreements. You’re not the only boss. If the partners disagree about which direction the business should go in and how much guns to put in, it can get unpleasant
• What is a disadvantage of a partnership?

  The profits are shared between partners