Revision Questions

1. Define factors of production. It is a term that describes the inputs that are used in the production of goods. For instance, land and labour. 2. What are the factors of production? Explain each. Give examples of each. Labour: Human resources, the people who are working towards producing something. Enterprise: The result when combining all of the factors of production. Capital: man made products, paper. Land: mostly natural resource, coal or petrol. 3. What are the four functional departments of a business? Explain each. Marketing: selling their product basing themselves on customer satisfaction. Personnel: The workers in the business. Production: the process of raw materials into finish products. Finance: the organization of the business money. 4. Explain why it is important for all four business functions to work closely together. It is important because, if the four business functions work together, the business can work effectively and become a viable business. Each function depends on each other to some extent and if the four work effectively then by definition your business is working properly. 5. How many business sectors are there? What are they? Define each and give one example for each. There are four business sectors. Primary: Raw materials, like getting petrol or cutting trees. Secondary: Production from raw materials, like making wooden chairs. Tertiary: Services, usually seen more in MEDC, like restaurants or cinemas. Quarterly: This is the technological sector, it involves things like research or scientific. 6. Explain how the number of people employed in each sector differs between less developed, developing and developed nations. Less developed countries: In less developed countries there isnt enough money to buy the machinery that the secondary, tertiary, and quarterly sectors require, and because of this they depend fully on their raw materials. This is why they stay in the primary sector and in some cases maybe the secondary. Developed: In developed countries, people have the money to afford luxuries like going to restaurant or going to the movies. Also the governments and organizations on developed countries are able to put lots of money into research for thing to improve our already comfortable lifestyle. They stay on the tertiary and quarterly sectors due to the money they have available to spend on these. More developed

countries can afford to buy products from the less developed countries from the primary and secondary sectors. Developing: These countries are in the middle of a transition, this meaning that slowly they will reduce their secondary sector and are moving towards the tertiary and quarterly sectors. 7.What is the difference between public and private sector organisations? 8. Define, mixed, free-market and command economies. Mixed economies: economies that combine private and public companies. Free-market economies: economies that arent run by the government and allow consumers to make transactions amongs other things freely. Command economies: These are economies in which price, production and income isdetermined by
the government.

9. Type of Business

Definition

Advantages (Give 3)

Sole trader A person that runs a company on its own

Partnership A business controlled by two or more people

Private limited company

A company where the shareholders can loose money but the company cant.

Disadvantages (Give 3) Who is this business structure suitable for? Taking High risk failure. A person who decisions No advising from works on his own and has fasters. other people. no desire to Recieve all Full work with profits. responsibility if other people. Control all faced with company failure. Two Help when Conflicts with companies or facing partner. people who difficult Slower process share the decisions. of decisions. same idea and Share Money division want to work responsanili problems together. ty, Low risk of failure. A person who Low risk If the price of doesnt wish failure. the share to take the lowers, the Easy risk of company loses decisions expending his money. making. Fraud of buying own money Constant on a project shares may money

input from share holders. Easy money. More consumer. More popularity in the market. Public sector Support enterprise A company from the runned by government the . government. Very low risk of failure. Easy to obtain money when needed. Non-profit A company Help with and nonthat just taxes. government sustains Ethically organisations themselves attractive. Easy to sustain because most workers are volunteers. Public Low risk of private The running low partnerships involment of on money. a private Help with company in a taxes due to governmental government project. involvemen t. Produces fast money. Public limited A private company company that sells its share on the stock market.

occur. Not very stable share value at the begging. Market colapse. Low share value Competitive market.

that might fail.

There may be big involvement from the government in decisions. Low control on the company. Goverment might be unethical. Can become non rentable. It might be low on volunteers. Its common to be low on money.

company with desires of expansion and to increase their reputation and popularity. A public school.

Charities.

Disagreement with government ideals. Difficult decision making. The government might overtake the project.

Private companies that may need help from a source, in this case the government.