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Tuesday, January 18, 2011

Business Studies short questions collection

Distinguish between private and public limited companies. [2]

Explain the significance for companies of limited liability. [3]

Define the term “span of control”. [2]

Explain the advantages of a broad “span of control”. [3]

Why is break-even analysis a useful tool for managers? [2]

By use of a diagram, show how break-even quantity is established by graphical method. Label

the axes and lines. [3]

Briefly explain the difference between a Balance Sheet and a Profit and Loss Account. [2]

What additional information does the Cash Flow Statement give about the financial position

of a business?

Distinguish between secondary and tertiary levels of activity.

Outline the benefits to a country of successful businesses. [3]

Define the term ‘added value’. [2]

Explain why it might be desirable for a firm to have high added-value products. [3]

Outline the functions of a trades union. [5]

Distinguish between revenue expenditure and capital expenditure. [2]

Briefly explain why different sources of finance might be needed for revenue expenditure and

capital expenditure. [3]

Define the term ‘sole trader’. [2]

Explain one disadvantage of being a sole trader. [3]

Define the term ‘price elasticity of demand’. [2]

Explain one determinant of demand for a product other than price. [3]

Outline two ways in which a manufacturer might control the quality of its products. [5]

Briefly explain the purpose of the Cash Flow Statement in company accounts. [2]

Briefly distinguish between internal and external sources of finance. [3]

Define span of control. [2]

Briefly explain why some people might prefer to work for a business with wide spans of

control. [3]

Explain liquidity. [2]

Explain one way in which a business might improve its liquidity. [3]

Outline the benefits of lean production for a manufacturer of electronic goods. [5]

With an appropriate example, explain what is meant by variable costs. [2]

Explain why it is sometimes difficult to separate costs into variable costs and fixed costs. [3]

Outline one difference between the public sector and private sector of an economy. [2]

Explain one difference between private and public limited companies. [3]

Define the term ‘redundancy’. [2]

Briefly explain the role of human resource management. [3]

Explain the importance of profit maximisation for a public limited company. [5]

Briefly distinguish between primary and secondary market research. [2]

Explain why a business might use quota sampling in market research. [3]

Explain one objective of a public sector organisation in your country. [2]

Briefly outline the main features of a ‘public limited company’. [3]

State the formula for an accounting ratio that might be used to measure the profitability of a

business. [2]

Explain two factors that might affect the profitability of a business. [3]

Briefly explain two ways in which a manufacturer of tinned foods might find break-even analysis

useful. [5]

Distinguish between the mean and the median. [2]

Briefly describe one business situation in which the median might be a more useful measure

than the mean. [3]

(a) State two objectives a business might set in the short run. [2]

(b) Briefly explain the importance to a business of setting objectives. [3]

(a) Define the term ‘quality control’. [2]

(b) Describe two ways in which a manufacturing company might control the quality of its

products. [3]

Explain how two different stakeholder groups might use the published accounts of a business.[5]

Define the term ‘working capital’. [2]

Describe one method a business might use to manage its working capital. [3]

What is meant by the term ‘market segmentation’? [2]

Why might a business segment the market for its products? [3]

Briefly explain how the Government assists businesses in your country. [5]

State two reasons why a business should ensure the quality of its products. [2]

Outline one way a business might ensure the high quality of its products. [3]

Distinguish between ‘revenue expenditure’ and ‘capital expenditure’. [2]

Briefly explain why a business should depreciate its fixed assets. [3]

State two different methods of measuring the size of a business. [2]

Briefly explain why it might be difficult to compare the size of different businesses. [3]

Explain why successful businesses are usually market-orientated. [2]

Why is it important for a marketing manager to understand the concept of the product life

cycle? [3]

Outline how, in your country, legal constraints might limit business activity. [5]

Why do businesses depreciate fixed assets? [2]

Explain why the payback period might be an important factor in deciding whether to invest in

new fixed assets. [3]

Distinguish between the public sector and private sector of an economy. [2]

Explain why some goods and services are provided by the public sector in your country. [3]

Outline how the market for soft drinks might be segmented in your country. [5]

Distinguish between the mean and the median of a set of data. [2]

Explain one business situation where the mode would be a useful measure. [3]

Define diseconomies of scale. [2]

Explain two different types of economies of scale from which a large retailer might benefit.


Define the term ‘free market economy’. [2]

State three legal controls which affect the way in which businesses operate. [3]

Briefly explain the importance for a manufacturer of managing working capital. [5]

State two different ways in which the size of a business might be measured. [2]

Briefly distinguish between niche and mass marketing. [3]

Define the term ‘work study’. [2]

Explain one way of using the results of work study to improve productivity. [3]

State two reasons why the market for a product might reduce in size. [2]

Distinguish between market size and market share. [3]

Explain how a manufacturing business might be affected by ethical issues. [5]

State two ways in which a business may achieve added value. [2]

Why is added value important for businesses? [3]

Define work study. [2]

Give three ways in which businesses might use the results of work study. [3]

Distinguish between assets and liabilities in a balance sheet. [2]

Briefly explain why businesses depreciate their fixed assets. [3]

Define the term “product portfolio”. [2]

Briefly explain the importance of the product life cycle in planning a product portfolio. [3]

Briefly discuss the importance of effective stock control for production managers. [5]

Define the term “levels of hierarchy”. [2]

Briefly explain the advantages of a matrix organisational structure. [3]

Define the term ‘span of control’. [2]

Explain one reason why an organisation chart would be useful to the employees in a

business. [3]

Other than price, outline one factor which could cause an increase in the demand for mobile phones. [2]

A business sells a product whose demand is relatively price inelastic. Explain the effect on

sales and revenue of a price increase. [3]

Briefly explain the importance of economies of scale to a manufacturer of cars. [5]

State two sources of finance which could be used to finance revenue expenditure. [2]

Explain the term ‘capital expenditure’. [3]

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