Business Fundamentals and Concepts

Mr. Evans provides a summary of Unit 1 for GCSE, covering business basics, opportunity cost, production sectors, liability types, business objectives, and growth strategies. Key concepts include the transformation of inputs to outputs, the importance of opportunity cost, and the distinction between different business structures and liabilities. The video also discusses business aims, objectives, and growth strategies, including economies and diseconomies of scale.

What is the primary goal of a business?

• To make a profit

• To provide employment

• To support the community

• To innovate new products

Which of the following is an example of opportunity cost?

• Choosing to invest in new technology over marketing

• Hiring more employees

• Expanding to a new location

• Increasing product prices

What is a key characteristic of a sole trader?

• Public ownership

• Unlimited liability

• Multiple owners

• Limited liability

How does a private limited company differ from a public limited company?

• It is owned by the government

• It controls who can become an owner

• It has unlimited liability

• It can sell shares on the stock market

What is a potential conflict between stakeholders in a business?

• Suppliers wanting long-term contracts vs. competitors wanting market share

• Shareholders wanting high dividends vs. employees wanting higher wages

• Managers wanting to expand vs. customers wanting lower prices

• Government wanting taxes vs. community wanting donations

Why do businesses create business plans?

• To set objectives and raise finance

• To reduce employee turnover

• To increase product prices

• To avoid paying taxes

What is the main objective of a new business in the short term?

• To grow internationally

• To survive or break even

• To maximize shareholder returns

• To innovate new products

What is the formula for calculating profit?

• Total revenue minus total costs

• Total costs minus total revenue

• Fixed costs plus variable costs

• Revenue divided by costs

What is organic growth in a business?

• Reducing workforce

• Merging with another company

• Acquiring a competitor

• Opening new stores

What are diseconomies of scale?

• Reduced costs due to increased production

• Increased costs due to inefficiencies at large scale

• Lower prices from bulk buying

• Higher revenue from increased sales