A-Level business paper 1 revision AQA Questions With Guaranteed Pass Solutions.
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Course
A-level BUSINESS
Institution
A-level BUSINESS
Why businesses exist - Answer Can make you money and you can be your own boss
Mission - Answer a business aim expressed to make it seem especially purposeful and motivating
Objectives - Answer SMART Specific, Measurable, Achievable, Realistic, Time-bound
Why businesses set objecti...
A-Level business paper 1 revision AQA
Questions With Guaranteed Pass
Solutions.
Why businesses exist - Answer Can make you money and you can be your own boss
Mission - Answer a business aim expressed to make it seem especially purposeful and motivating
Why businesses set objectives - Answer - it is motivating to have a goal to aim toward
- as a boss you can not make every decision
Profit - Answer Revenue - total costs
What are the 5 types of business - Answer -sole traders
-private limited companies (LTD)
-Public limited companies (PLC)
-Private and public sector organisations
- non-profit organisations (charities)
Sole traders - Answer a business that is owned and operated by one person
Private Limited Company (Ltd) - Answer A small to medium sized company, owned by shareholders
who have limited liability. The company cannot sell its shares to the general public.
Private Limited Company Advantages - Answer -Limited liability
-Additional capital can be raised by selling shares (not to the general public)
,-Separate legal existence to the owner
-Higher business status to sole trader
Private limited company Disadvantages - Answer -You have to publish the account information
-You need two share of £1 each
Public limited company (plc) - Answer A limited company with more that £50,000 of share capital. Any
member of the public can buy shares. Public companies must publish more detailed accounts
Public limited company Advantages - Answer -Raising capital through public issue of shares
-Offering shares to the public spreads risk
-Banks are more likely to lend money to PLC's
-More growth and expansion opportunities
-Having PLC at the end of your business name gives a better image
-Shares are more easily transferred so shareholders are happier
-Separate legal entity to the owner
public limited company Disadvantages - Answer -More regulations that could increase costs
-Higher level of transparency needed
-Must start with £50,000 share capital
Private sector organisations - Answer Organisations owned by individuals or companies
Public sector organisations - Answer Businesses owned by the government.
Non-profit organisations - Answer Businesses with a motive other than profit, may be to provide a
social benefit or service to society or to support a cause.
Share capital - Answer The total value of capital raised from shareholders by the issue of shares
,Role of Shareholders - Answer to raise important issues with the board directors and raise funds
Market capitalisation - Answer Number of issued shares x current share price
Influences on the price of shares - Answer -The profit after tax of the company x the value investors
place on on those earnings
Significance of share price changes - Answer High = cheap and easy to obtain more share capital
Low = unlikely to raise any extra share capital
What are the 6 external factors affecting businesses - Answer -Market conditions
-Competition
-Changes in household incomes
-Changes in interest rates
-Demographic factors
-Environmental issues
Market Conditions - Answer -The number of competitors in a particular market
-The intensity of competitiveness
-Total market available
-The rate at which the market is growing
Competition - Answer The tighter the economic and market conditions, the greater the competitive
pressures tend to be
, Factors that effect household incomes - Answer -Changes in the real income of the main income earner
-The number of people in the household that work
-The impact of government decisions on taxation and benefits
Changes in interest rates - Answer If interest rates go up, businesses and individuals spend less. If
interest rates go down, businesses and individuals spend more.
Demographic factors - Answer -Population size
-Age
-Gender
-Ethnicity
Environmental issues and fair-trade - Answer Concern for green issues and ethical issues involved with
business.
What do managers do - Answer Set objectives, organize, motivate and communicate, measure, develop
people
What are the leadership styles - Answer -Autocratic managers
-Democratic managers (laissez-faire)
-Paternalistic
Autocratic managers - Answer Managers who centralise power and tell employees what to do. They
tend to use one-way, top-down communication.
Democratic managers (laissez-faire) - Answer Managers that take the view of their subordinates into
account when making decisions as well as delegating authority. Communication tends to be two-way.
'Laissez-faire' means 'Let it be"
Paternalistic managers - Answer They try to do what is best for their staff. There may be consultations
to find out the views but the boss always makes the final decision.
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