1.5 Feedback Quiz

Which one of the following best defines the term stakeholder?

• Someone with an interest in the success of a business

• An owner of a private limited company

• Any individual who takes decisions within a business

• An individual who owns shares in a business

Answer explanation

A stakeholder is defined as someone with an interest in the success of a business. This includes owners, employees, customers, and others who are affected by or can affect the business's outcomes.

Which one of the following is a definition of an exchange rate?

• The value of one currency in terms of another currency

• The flow of goods and services into a country

• A tax on a particular good or service

• When businesses operate on an international scale

Answer explanation

The correct definition of an exchange rate is "the value of one currency in terms of another currency." This reflects how much of one currency you need to spend to acquire another.

Which two of the following are possible impacts on a small business of lower interest rates?

• Customers more likely to purchase using credit;Lower costs of borrowing money

• Higher fixed costs

• Lower insurance premiums

• Increased variable costs due to higher loan repayments

Answer explanation

Lower interest rates make borrowing cheaper, encouraging businesses to take loans and customers to use credit for purchases. This leads to increased sales and lower costs of borrowing, benefiting small businesses.

Which two of the following are types of technology that could be used by a business?

• Digital communication;Payment systems

• Consumer law

• Crowd funding

• Marketing mix

Answer explanation

Digital communication and payment systems are essential technologies for businesses, enabling efficient communication and transactions. Consumer law, crowdfunding, and marketing mix are not types of technology.

What is one possible conflict that can exist between stakeholders of a business?

• Owners wanting high profits vs. employees wanting higher wages

• Customers wanting high prices vs. the business wanting low prices

• Suppliers wanting low prices vs. the business wanting high prices

• The government wanting low taxes vs. the business wanting high taxes

Answer explanation

One possible conflict is between owners wanting high profits and employees wanting higher wages. Owners aim to maximize profits, while employees seek better compensation, leading to opposing interests.

What is one advantage to a small business of meeting all employment legislation?

• Improved employee morale and motivation

• Reduced operating costs

• Increased flexibility in hiring and firing

• Exemption from paying taxes

Answer explanation

Meeting all employment legislation fosters a positive work environment, leading to improved employee morale and motivation. This can enhance productivity and reduce turnover, benefiting the small business overall.

What is a potential impact on Meringue of allowing customers to order their food online in advance?

• Improved customer convenience

• Decreased sales

• Reduced efficiency in the kitchen

• Increased food waste

Answer explanation

Allowing customers to order food online in advance enhances convenience, making it easier for them to plan their meals and reducing wait times, which can lead to increased customer satisfaction and loyalty.

When considering options to reduce rising costs

• what is a potential risk of buying cheaper ingredients from different suppliers?

• Damage to the business's reputation

• Improved product quality

• Increased customer satisfaction

Answer explanation

A potential risk of buying cheaper ingredients from different suppliers is damage to the business's reputation. Lower quality ingredients can lead to inferior products, which may upset customers and harm the brand's image.

When considering options to reduce rising costs

• what is a potential risk of charging higher prices for tea?

• Loss of customers to competitors

• Increased sales volume

• Lower revenue

Answer explanation

A potential risk of charging higher prices for tea is the loss of customers to competitors. Customers may seek more affordable options elsewhere, leading to decreased market share.

How might a decrease in the exchange rate affect a business that imports goods?

• Imported goods become more expensive

• Imported goods become cheaper

• The cost of exporting goods increases

• Domestic sales are likely to decrease

Answer explanation

A decrease in the exchange rate means that the value of the domestic currency has fallen relative to foreign currencies. As a result, imported goods become more expensive for businesses, leading to higher costs.