Business Activity
What is the main goal of private sector businesses?
To make profit
What is the process of finding and choosing suitable employees called?
Recruitment
What are the four Ps of the marketing mix?
Product, Price, Promotion, Place
A factory produces 10,000 identical bottles using an automated production line. Which type of production is this?
Flow Production
A business sells 2,000 units for $15 each. What is its sales revenue?
$30,000
What is the process of combining resources to produce goods or services called?
Production
Why would a business not promote its existing employee and recruitment someone externally?
External recruitment → access to workers with specialised skills → potentially improved business performance.
A company discovers that most of its customers are aged 16–20. What type of market segmentation has it used?
Demographic Segmentation
What type of production makes products individually or in small quantities?
Job Production
The weakening of one currency compared in relative to another
Depreciation of currency
What are the four factors of production?
Land, labour, capital, and enterprise
What is the difference between internal and external recruitment?
Internal recruitment fills a position from within the business, external recruitment looks outside the business
What is the term for dividing customers into groups based on characteristics such as age, income, or lifestyle?
Market Segmentation
A business holds too much inventory. Give one disadvantage of this.
Money is idle in inventory as storage costs increase. There is a higher risk of damaged stock.
What term describes a business's ability to pay its short-term debts?
Liquidity
What is the benefit of adding value to a product?
Example: Added value → higher selling price → higher revenue per unit → potentially higher profit.
Employees at a company have high absenteeism and low motivation. How might a business motivate its employees?
Example:
- Higher pay
- Provide training
- Promotion Opportunities
Why does market research benefit a business?
Example:
Market research → better understanding of customer needs → product is more likely to meet demand → higher sales → higher profit.
What is the main purpose of quality control?
To identify defective products or problems before they reach customers
A business has fixed costs of $30,000 and variable costs of $5 per unit. It sells each unit for $15. What is the contribution per unit?
$10
A business has $50,000 of sales revenue and costs of $35,000. What is its profit?
$15000
A manager gives an employee extra responsibility and authority for completing a task. What is this called?
Delegation
Give one advantage and disadvantage of marketing
Benefit: Marketing can increase sales by making more customers aware of the product.
Disadvantage: Marketing can be expensive, increasing the business’s costs and potentially reducing profit.
A business introduces automation during production, give one advantage and disadvantage.
Advantage: Automation can increase productivity because machines can produce goods faster and more accurately than workers.
Disadvantage: Automation has a high initial cost because the business needs to buy it.
A business is profitable but still can have cash flow problems. Why?
Credit sales → cash has not yet been received → insufficient cash available → cash-flow problems.