GCSE Theme 1 Recap

Which of the following is a purpose of business activity?

• To reduce unemployment
• To produce goods and services
• To regulate the economy
• To collect taxes

Answer explanation

Businesses exist to produce goods and services to meet customer needs.

An entrepreneur is best described as someone who:

• Works for a large business
• Runs their own business and takes risks
• Provides government funding
• Works without pay

Answer explanation

Entrepreneurs take risks and organise resources to run their own businesses.

Which of the following is an example of a fixed cost?

• Factory rent
• Raw materials
• Delivery costs per mile
• Packaging per unit

Answer explanation

Fixed costs, such as rent, do not change with output.

Market research that uses government statistics is:

• Primary research
• Secondary research
• Qualitative research
• Field research

Answer explanation

Government statistics are secondary data, collected by others.

Which of these is a financial objective?

• Survival
• Customer satisfaction
• Growth
• Social responsibility

Answer explanation

Growth is a financial objective focused on increasing sales or revenue.

The formula for calculating profit is:

• Sales revenue – variable costs
• Sales revenue – total costs
• Total costs – sales revenue
• Sales revenue × units sold

Answer explanation

Profit is calculated as sales revenue minus total costs.

Which of the following is a USP (unique selling point)?

• Reducing prices
• A feature that makes a product different
• Increasing promotion
• Expanding distribution channels

Answer explanation

A USP makes a product stand out from competitors.

Which business type has limited liability?

• Sole trader
• Partnership
• Private limited company (Ltd)
• Franchisee

Answer explanation

Private limited companies protect owners with limited liability.

A person who buys the rights to trade under an existing brand is called a:

• Franchisor
• Franchisee
• Partner
• Investor

Answer explanation

The franchisee buys the rights to operate under a franchisor's brand.

An example of organic growth is:

• Takeover of a competitor
• Merger with another firm
• Opening a new branch
• Becoming a public limited company

Answer explanation

Organic growth is growth from within the business, like opening a new branch.