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30 Cards in this Set
- Front
- Back
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What is creative destruction? |
Refers to the way in which quality improving interventions lead to economic growth. Customers switch to new products and old products become obsolete. Innovations that cut costs and eventually ,prices, will have the same effect. |
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What is an entrepreneur? |
An entrepreneur can be briefly defined as someone who organises a business venture and is responsible for the risks involved. The entrepreneur will decide what will be produced and how it will be created, obtain the finance to cover start-up costs and decide the price at which it will be marketed. |
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What must entrepreneurs responsible for? |
Entrepreneurs are responsible for putting the business ideas into practice. They must plans the Venture, organise resources needed and then oversee production. |
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What is added value? |
Added value is the difference between the price of the finished good or service and the cost of the material inputs involved in making it. |
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What is the formula for added value? |
Added Value = Price - production cost |
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What is adding value? |
Adding value means altering the production so as to increase its value to the customer. All businesses add value to the product by improving it in some way or by providing it in the locations where customers want it. |
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Where does the value that is added come from? |
Comes from the activities of the business. It all starts with inputs, which might be raw materials, or components of final products that are going to be marketed and sold. In dynamic markets, value is often added by employees who design and innovate. |
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Give an example of how retailers add value? |
Retailers buy products from suppliers and use their premises to display the goods (the inputs) in a convenient location (which adds value). The workforce will provide customer service, adding more value . |
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What is profit ? |
Difference between sales revenue and costs . In a competitive market , profit acts as a signal , encouraging businesses to create products customers want to buy. |
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Why is profit an incentive to someone entrepreneurs? |
So many people one of the main reasons why businesses to make money this can improve their lifestyle and secure a good standard of living for the families. Profit rewards successful entrepreneurs for the hard work and risks they have to live with |
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How does profit reward entrepreneurs? |
Professor rewards on Japanese matching their products the needs of the buyer and taking risks. The riskier the business the greater the prospect of profit has to be to create an incentive to go ahead. |
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What is ethical stance as a incentive for an entrepreneur? |
An increasing number of entrepreneurs want to do the right thing. The businesses focus on providing ethical and environmentally friendly products. |
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What is social entrepreneurship as a incentive for an entrepreneur? |
Social entrepreneurs use their entrepreneurial skills to achieve benefits for Society. The main aim of social entrepreneurship is to further social and environmental goals. |
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What is independence as a incentive for an entrepreneur? |
Being your own boss is a strong motivating factor for some, knowing that their own decisions determine the success of the business. Being able to achieve a dream or an ambition may be reward enough in taking on the risks. |
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Why is home working an incentive for some entrepreneurs? |
Many people now choose to start their own business or become self-employed and work from home. Digital technology now means that finding office space is no longer necessary and may fit in with family routines. |
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What are the four factors of production? - explain them |
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What is the division of labour? |
The division of labour involves individuals in specialising in one particular type of activity in the workplace. Each employee will have a specific task; repeating this task will help them do it fast and well. |
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Advantages of the division of labour ? |
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Disadvantages of the division of labour? |
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What is specialisation ? |
Specialisation refers to the way in which, people organisations and economies concentrate on specific economic activities, often because they have some advantage in that field. |
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What is the advantage of specialisation to the firm? |
A mechanic specialises on a certain make of car, a doctor certain field of medicine. Such specialisation allows tr individual to get greater knowledge to improve both quality and quantity of the product concerned. |
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What can too much specialisation lead too? |
Too much specialisation can lead to inflexibility. If someone not present difficult to work as normal as have to cover for them. A specialises worker with narrow skill set may find it difficult to find new work. |
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What is an interet rate? |
Price if borrowed money. It is essentially the fee the lender gets for risking his money and letting people borrow it. |
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What is an exchange rate? |
Price of one currency in terms of another |
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Implications for a firm if interest rate changes? |
Increase: Less likely to borrow money when it rises. Investment may be slow. May fave falling demand. Decrease: investment may increase. Experience rising demand. New business startup because of lower costs. |
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What is effect on business when exchange rates change? |
SPICED - strong pound imports cheaper exports dearer - business that import costs will fall so can reduce prices WPIDEC Weak pound imports dearer exports cheaper - helps business that export , goods cheaper |
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Difference between indirect and direct taxation? |
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How does changing taxation levels effect a business? |
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What is unemployment? |
Can be defined as the number of people able and willing to work but not able to find a paying job |
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Effect of rising unemployment on business? |
People have less income so spend less. Demand for luxury items falls. E.g. Designer clothes, cars and holidays Some business will see Increase in turnover if cheaper substitute Dominos turnover rose 12% in 2009 Wages less likely to rise as more competition for jobs |
