Buisness 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

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

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

Which of the following is an advantage of growth through opening new stores?

• Growth may be dependent on overall market growth

• Less risky than taking over other businesses

• Fast way of growing market share compared to external growth

• New stores are guaranteed to be successful

When a business increases its sales as a percentage of total market sales it is said to be:

• Increasing its market share

• Improving its customer satisfaction

• Increasing its shareholder value

• Maximising its profits

Which type of business is likely to have increasing shareholder value as an objective?

• Sole trader

• Partnership

• Public limited company

• Not-for-profit organisation

Last year a business sold 500 units per year. Fixed costs per year were £25,000 and its variable cost per unit was £90. This year sales and fixed costs remained the same, but variable costs per unit have increased by 10%. What is the business’s total costs this year?

• £20,000

• £24,500

• £70,000

• £74,500