Revision Questions

1. Define factors of production. 2. What are the factors of production? Explain each. Give examples of each. - Basically resources required for the generation of goods and or services. They are usually classified or divided into 4 specific groups: - Land: natural recourses - Labour: human recourses - Capital: money generated, all man-made recourses - Enterprise: The outcome of the combination of Land, Labour, and Capital. 3. What are the four functional departments of a business? Explain each. - Production: Finished products from raw materials that are ready to be sold to costumers. - Finance: The business or organisations money being managed by the financial department; for example taxes and income. - Marketing: Persuade and satisfy costumers into buying product. - Personnel: Business or organisations workers, people which work for the company. 4. Explain why it is important for all four-business functions to work closely together. - As the four functional departments of a business work together a good organisation and control will eventually be forged and so the production and income of the business/organisation will surely increase. The sales will increase and the company will gather a better reputation and so the company will gather and even greater increase in income. 5. How many business sectors are there? What are they? Define each and give one example for each. Overall there are 4 sectors Primary: Everything related to the gathering of raw materials such as wood Secondary: The product of raw materials. For example a t-shirt made out of cotton. Tertiary: Firms, businesses and organisations such as Orange or Claro. Quaternary: The technological sector, usually involves research

6. Explain how the number of people employed in each sector differs between less developed, developing and developed nations. - Developed: The first two sectors, Primary and Secondary, will be almost empty because developed countries use undeveloped countries for the use of those two sectors. In a developed country most people will have a degree in something and so

education being greater, there are less people for the primary and secondary sectors and more for the Tertiary and Quaternary sectors. - Developing: The primary and secondary sectors are still being used, however the amount of people for those sectors is decreasing and the amount of people for the Tertiary and Quaternary sectors are rapidly increasing. The Quaternary sector however takes much longer than the Tertiary sector to develop. - Un-developed/Less developed: The Primary sector will be the greatest sector between all four, more people will be employed in this sector and there will be plenty of work because many organisations from the developed countries will be using the un-developed countries for this sector. The Secondary sector will also be a great thing however not as big as the primary sector. People aim for these sectors because they are the only sectors available for the level of education that they have. Tertiary and Quaternary will be almost empty. 7.What is the difference between public and private sector organisations? - The government controls the public sector organisation, for example public schools in the US. Private sector organisations are organisations controlled by one person or a group of persons; the difference is that the government does not control them. For example Microsoft and Apple. 8. Define, mixed, free-market and command economies. - Mixed economies: Public and private economies combined. - Free-market economies: The government does definitely not run them. They try to avoid taxes and subsidies. - Command economies: The government determines Income, Price and Productions economies. 9. Type of Business Definition Advantages (Give 3) Disadvantages (Give 3) Who is this business structure suitable for? Anyone who wishes to be their own boss and for people who run small businesses.

Sole trader A company owned and controlled by one person.

All profits go to the owner Decisions are far easier Control over the entire company.

Partnership

A company owned by

Low risk of failure and it its easier to

A higher risk of failure and there is no help in making decisions. Entire responsibility to the owner. If the company falls so does the owner. Problems between People who owners can lead the need someone

two people (friends/ partners)

run the company since ideas can be shared. More money to sustain the company.

company to bankruptcy. Disagreement and money issues.

Private limited company

A private company owned by shareholders

Public limited Where its company companies shares are available in the stock market.

Limited risk. The company cant loose money but only the shareholders can. The company will always be successful. Easy to make money and if the company is doing well people will know about it and the companys reputation will improve.

else to open the company because of money. People who dont want to run the company alone. No reliability with A company the handling of controlled by money by the an shareholders. entrepreneur Easy to loose but owned by money. the No shareholders=no shareholders. company. There is no A company reliability in buying wishing to go shares. The shares public and that only maintain the wants to keep company so if there on expanding. is a market collapse the company will go bankrupt. If the price of the shares decreases so does the companies income. No decision-making. If people dont like how the government is running the company then they prefer the company to change management. Bad management from the government may lead the company to complete failure and bad reputation. Public schools, Universities or medical research.

Public sector enterprise

Company or organisation that is run by the government.

Government takes care of everything. No risk and simple to generate money.

Non-profit and nongovernment organisations

Not enough money to support company. If the organisations reputation is bad people will be interested in investing in other organisations with a better reputation. If the organisations management isnt ethical many problems will arise and ruin the company. Public-private Private Faster generation of If the government is partnerships companies income. unethical people involved with Government has no might reject the the risk. idea and so the government Reputation will company will earn a for a certain increase and the bad reputation. project. demand for the Disagreement companys service between company will as well. and government.

A company or organisation that does not generate any profit/ income.

You help other people and help the expansion of the idea of helping other people by influencing others with your accomplishments. Little risk depending on management. If good reputation the organisation will expand.

Charities.

Private companies that want a better reputation and or a better relationship with the government.