AS Business Unit 1 Question Preview (ID: 47292)
Chapter 1 To Chapter 5.
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When a business ‘creates or adds value’ it increases:
a) the difference between the cost of purchasing raw materials and the price the finished goods are sold for
b) the number of products it sells
c) the difference between the cost of producing a product and the price for which it is sold
d) the difference between the price of a product and the variable cost of its production
An entrepreneur is someone who:
a) is an employee of a business enterprise
b) takes the risk of starting and managing a business venture
c) works for the government to provide public services
d) just provides capital to a business start-up
A dynamic business environment means:
a) factors external to the business are never constant
b) new employees are being recruited
c) a business is constantly changing its products
d) factors external to the business are easy to forecast
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 company has a separate legal identity.
d) The death of an owner usually results in the dissolution of the business.
Market capitalisation is defined as:
a) the total value of market sales made by a business in a given time period
b) the total value of all long-term finance invested in the business
c) the total value of a company’s issued shares
d) the difference between a firm’s revenue and costs
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) external growth
b) vertical expansion
c) integration
d) internal growth
What is a mission statement?
a) a set of SMART objectives
b) the individual targets set for employees
c) corporate objectives
d) a statement of the business’s central purpose
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) Paying bonuses to senior managers in recognition of their contribution to increasing profit.
c) Increasing short-term profit by reducing spending on safety equipment on its oil rigs.
d) Providing financial support to an education charity.
Which one of the following is an accurate definition of the term ‘stakeholder’?
a) People or groups of people who have an interest in the success of a business.
b) People or groups of people who own shares in a business.
c) People or groups of people who have a legal responsibility for the success of the business.
d) The customers of a business.
Which one of the following is an example of how an ethical decision might reduce business profit?
a) A confectionery manufacturer decides not to advertise directly to children as sweets can cause tooth decay.
b) A car manufacturer fits cheaper seat belts to some of its models.
c) A business producing chemicals chooses a simpler but less effective way of disposing of waste products.
d) A social media business sells information about its users to a market research company.
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