paper 1

• What are the two main categories of economic offerings?

  Goods and services
• What distinguishes goods from services?

  Goods are tangible, services are intangible
• What are the factors of production?

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

  The sacrifice made when making a decision
• What are the three business sectors?

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

  Construction and manufacturing
• What are key characteristics of an entrepreneur?

  Hardworking, innovative, organized, risk-taking
• What are common objectives of an entrepreneur?

  Be your own boss, earn more money
• What does dynamic change refer to in business?

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

  Technology, environment, legislation, economy
• What is the impact of technology on businesses?

  Facilitates digital communication and e-commerce
• What are the types of business ownership forms?

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

  Unlimited liability
• What is limited liability?

  Liability limited to the amount invested
• What is an advantage of public limited companies?

  Access to enormous finance
• How are profits distributed in public limited companies?

  Through dividends to shareholders
• What is the divorce of ownership and control?

  Separation between managers and owners
• What is the significance of business objectives?

  Guide decision-making and strategy
• What can influence business objectives?

  Size, competition, type of business
• How do business objectives evolve over time?

  From survival to profit maximization
• Who are stakeholders in a business?

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

  Shareholders want higher dividends, employees want pay raises
• What factors influence business location?

  Proximity to market, raw materials, labor availability
• 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
• Why create business plans?

  To raise finance and set objectives
• What are issues related to business plans?

  Expense and time can delay market entry
• What are methods of growth in business?

  Internal growth and external growth
• What is internal growth?

  Growth through franchising, outsourcing, new stores
• What is external growth?

  Growth through takeovers and mergers
• What are economies of scale?

  Lower average costs per unit through growth
• What are purchasing economies of scale?

  Lower costs from bulk buying from suppliers
• What are technical economies of scale?

  Lower costs 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 legislation on businesses?

  Increases costs and training needs
• What are the three types of laws to be aware of?

  Employment law, health and safety, consumer laws
• What is employment law?

  Laws ensuring fair treatment of employees
• What is health and safety law?

  Legal framework for workplace safety
• What is consumer law?

  Laws protecting consumers from false information