1.Business In The Real World

Machinery is an example of which factor of production:

• Land

• Labour

• Capital

• Enterprise

The total output of a business is 20,000 units and the total costs of production are £250,000. The average unit cost is:

• £0.08

• £1.25

• £8.00

• £12.50

A business decides to use £1 million from its bank account to invest in new machinery. The opportunity cost of this decision is that the:

• New machinery may increase business output

• Business is no longer earning money (interest) in the bank

• Business has to pay £1 million for the new machinery

• Quality of the product may be improved

Conflict is likely to occur between which of the following stakeholder groups when a factory decides to introduce a night shift to increase output levels:

• Suppliers and employees

• Owners and local community

• Customers and owners

• Employees and customers

Which of the following defines the term fixed cost? A cost which:

• Varies according to revenue

• Is only ever paid once

• Varies according to output

• Stays the same regardless of how much is produced

Details regarding how products will be produced and information relating to suppliers will be included in which part of a business plan?

• Marketing

• Human Resources

• Finance

• Business Operations

A business which grows potatoes and makes them into crisps is said to be operating in the:

• Primary and secondary sectors

• Primary and tertiary sectors

• Secondary and tertiary sectors

• Primary, secondary and tertiary sectors

A business decides to increase its selling prices. Which of the following stakeholders is most likely to be affected?

• Suppliers

• Local community

• Employees

• Customers

Which of the following statements is true of a public limited company?

• It has unlimited liability

• It is owned by the board of directors

• It does not have to pay its shareholders a dividend

• It is controlled by shareholders

Which of the following businesses is most likely to locate next to a source of skilled labour?

• Fast food restaurant

• High street fashion chain

• A budget hotel

• A car manufacturing plant