External Influences on Business Activity

Legal controls over business activity may aim to achieve which one of the following?

• Reduce prices to consumers below the cost of making product

• Reduce exploitation of workers by powerful employee

• Lower business profits so that less investment takes place

• Reduce number of businesses so that consumer choice become easier

Which one of the following is a common benefit of Employment laws?

• Businesses have to employ more workers to reduce unemployment

• Workers must be trained by businesses to improve their chances of promotion

• Workers must be given a written employment contract containing key conditions

• Businesses have to increase workers' pay regularly

One reason why a business may not introduce Information Technology (IT) could be:

• IT is still under development and most computers are unreliable

• a multinational business is so large that the purchase of computer systems would be beyond its resources

• Few other business in the world use IT so it would not be possible to communicate with them using IT

• a sole-trader offers services to consumers that do not require IT to provide them

An ageing population could lead to which one of the following possible effects on a business?

• The business increases research into new products for the younger generation

• The business will increase its total level of employment

• The business may increase the age at which its workers can retire

• The business will continue to make the same products that it developed many years ago

One claimed benefit of producing an environmental audit as part of a firm's Corporate Social Responsibility report is:

• it will reduce the costs of the business

• the printing of the environmental audit will improve the environment

• it proves to stakeholders that the businesses operations will now have no negative impact on the environment

• it indicates to stakeholders how the business is attempting to reduce its environmental impact

One of the reasons why pressure groups are sometimes successful in changing the decisions of business is:

• a consumer boycott of a firm's products could result in lower profits

• the business has large cash reserves

• the business sells products to other business customers not directly to consumers

• the business has a large promotion budget spent on TV and newspaper advertising

How do monopolies develop?

• No barriers to entry into an industry

• merging or taking over other firms in the industry

• increased expenditure of new products

• limited choices of products

What is the advantage of CAM?

• labour costs are reduced as machine replace many workers

• saves on expensive designer salaries as work is now much quicker

• more flexibility of design

• can be linked to other program

Which one is the drawback of monopolies?

• lower prices in large scale production

• increased expenditure on new product

• various choice of products

• less investment in new products

Which one is the limitation of social audits?

• sets target for improvement in social performance

• improves a company's public image

• time and money must be devoted to producing a detailed social audit

• identifies what social responsibilities the business is meeting