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AS Business Unit 1
Test Description: Chapter 1 to Chapter 5
Instructions: Answer all questions to get your test result.
1) When a business ‘creates or adds value’ it increases:
A
the difference between the price of a product and the variable cost of its production
B
the difference between the cost of purchasing raw materials and the price the finished goods are sold for
C
the difference between the cost of producing a product and the price for which it is sold
D
the number of products it sells
2) An entrepreneur is someone who:
A
takes the risk of starting and managing a business venture
B
is an employee of a business enterprise
C
just provides capital to a business start-up
D
works for the government to provide public services
3) A dynamic business environment means:
A
new employees are being recruited
B
factors external to the business are never constant
C
factors external to the business are easy to forecast
D
a business is constantly changing its products
4) Which one of the following is not a characteristic of a limited company?
A
It is owned by shareholders.
B
Owners have limited liability.
C
The death of an owner usually results in the dissolution of the business.
D
The company has a separate legal identity.
5) Market capitalisation is defined as:
A
the difference between a firm’s revenue and costs
B
the total value of a company’s issued shares
C
the total value of all long-term finance invested in the business
D
the total value of market sales made by a business in a given time period
6) Aldi, a German supermarket chain, has pursued a policy of growth through opening new stores in towns and cities where it previously had none. This is an example of:
A
integration
B
external growth
C
vertical expansion
D
internal growth
7) What is a mission statement?
A
corporate objectives
B
a set of SMART objectives
C
a statement of the business’s central purpose
D
the individual targets set for employees
8) Which one of the following best illustrates the behaviour of an oil company that is concerned about its social responsibilities?
A
Making donations to a political party.
B
Increasing short-term profit by reducing spending on safety equipment on its oil rigs.
C
Providing financial support to an education charity.
D
Paying bonuses to senior managers in recognition of their contribution to increasing profit.
9) Which one of the following is an accurate definition of the term ‘stakeholder’?
A
People or groups of people who own shares in a business.
B
People or groups of people who have an interest in the success of a business.
C
The customers of a business.
D
People or groups of people who have a legal responsibility for the success of the business.
10) Which one of the following is an example of how an ethical decision might reduce business profit?
A
A car manufacturer fits cheaper seat belts to some of its models.
B
A confectionery manufacturer decides not to advertise directly to children as sweets can cause tooth decay.
C
A social media business sells information about its users to a market research company.
D
A business producing chemicals chooses a simpler but less effective way of disposing of waste products.
*select an answer for all questions
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