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Business Studies Fundamentals
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Business Studies Fundamentals
Business Studies Fundamentals
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1
Question
What is the definition of land as a factor of production?
Answer
All natural resources that are used to provide goods and services. This includes not just the ground itself, but also minerals, oil, and water.
2
Question
What does the factor of production 'labour' represent?
Answer
The physical and mental effort contributed by people to the production process. This includes all employees in a business.
3
Question
What is 'capital' in the context of factors of production?
Answer
The man-made aids to production, such as machinery, tools, and factories. It also refers to the money used to buy these items.
4
Question
What is the role of 'enterprise' as a factor of production?
Answer
The skill and risk-taking involved in combining land, labour, and capital to produce goods. It is usually provided by the entrepreneur.
5
Question
What is the primary purpose of business activity?
Answer
To produce goods and services that satisfy the needs and wants of customers. This creates value and solves problems for consumers.
6
Question
What is the difference between a 'need' and a 'want'?
Answer
A need is a basic requirement for survival (e.g., food, shelter). A want is a desire that is not essential but makes life more comfortable.
7
Question
What is meant by the 'primary sector' of industry?
Answer
Businesses involved in the extraction of raw materials from the earth. Examples include farming, mining, and fishing.
8
Question
What is the function of the 'secondary sector'?
Answer
Businesses that process raw materials into finished or semi-finished goods. This includes manufacturing and construction.
9
Question
What does the 'tertiary sector' provide?
Answer
Services to consumers and other businesses. This includes retail, banking, tourism, and transportation.
10
Question
What is the definition of an entrepreneur?
Answer
An individual who spots a business opportunity, takes the initiative to set up a business, and carries the risk of failure.
11
Question
What is meant by 'opportunity cost'?
Answer
The benefit lost from the next best alternative that was given up when a choice was made.
12
Question
What are the characteristics of a Sole Trader?
Answer
A business owned and managed by one person. They have total control but also unlimited liability for all business debts.
13
Question
What does 'unlimited liability' mean for a business owner?
Answer
The owner is personally responsible for all business debts. If the business fails, the owner may have to sell personal assets (like their house) to pay creditors.
14
Question
What is a Partnership?
Answer
A business owned by between 2 and 20 people. Partners share the workload, capital investment, and profits, but usually have unlimited liability.
15
Question
What defines a Private Limited Company (Ltd)?
Answer
A business owned by shareholders with limited liability. Shares cannot be sold to the general public and are usually traded between family and friends.
16
Question
What defines a Public Limited Company (PLC)?
Answer
A large business with limited liability that can sell shares to the general public on the stock exchange.
17
Question
What is 'limited liability'?
Answer
A legal protection where shareholders only lose the money they invested if the business fails. Their personal assets are safe.
18
Question
What is a 'Social Enterprise'?
Answer
A business that trades to tackle social problems, improve communities, or help the environment. Profits are reinvested into the social mission rather than just for owners.
19
Question
What are 'Business Objectives'?
Answer
The specific goals or targets that a business wants to achieve, such as survival, profit, growth, or increased market share.
20
Question
What is 'Market Share'?
Answer
The percentage of total sales in a market that is made by one specific business.