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Unit 1 - Business Quiz Flashcards | StudBud
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Unit 1 - Business Quiz
Unit 1 - Business Quiz
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1
What is a major disadvantage of a partnership?
No need to share profits
Difficulty in forming a legal entity
Limited liability for partners
Disagreements between partners
2
What is a key advantage of a sole trader business?
Higher chances of raising capital
Limited responsibility for business debts
Full control over decision-making
Unlimited liability
3
What is the meaning of added value ?
Difference between wages and cost of materials
Increasing the difference between cost of materials and the selling price
Difference between cost of materials and selling of the finished goods
Increase in customer satisfaction over 1 financial year
4
What is a key reason for the existence of the public sector?
To maximize profits for shareholders
To reduce government intervention in the economy
provide goods and services that may not be profitable
encourage competition among businesses
5
What is the primary benefit of limited liability in a private limited company?
Owners’ personal assets are protected if the business fails
The company ceases to exist after the owner’s death
The business cannot raise capital through shares
Owners are personally responsible for company debts
6
What is a social enterprise?
A private company that avoids social responsibility
nonprofit organization fully funded by the government
A business that only aims to maximize profits
Business reinvests profits for social or environmental benefits
7
What is not advantage of sole trader?
Owner can choose time and patterns of working
Freedom to make decisions
Owner keep all the profits
Limited liability
8
What is the most common form of business ownership in the private sector?
Sole trader
Public enterprises
Partnership
Corporation
9
When changing the form of business ownership, what is an important factor to consider?
The owner’s favorite business structure
The number of employees in other businesses
The color of the company logo
The ability to raise capital and the level of control
10
Which of the following is a characteristic of a joint venture?
It does not involve sharing resources
It is always a nonprofit organization
One company has full ownership and control
It involves a temporary partnership between companies
11
Which of the following is a common feature of cooperatives?
Only large corporations can establish cooperatives
Ownership is limited to government employees
Profit is shared only among top executives
Members have equal voting rights in decision-making
12
What sector does computing, web design, information and communication belong to
Primary sector
Quaternary sector
Tertiary sector
Secondary sector
13
What is one of the key responsibilities of businesses towards employees?
Only hiring workers on a temporary basis
Paying them as little as possible to maximize profits
Providing fair wages, job security, and a safe working environment
Avoiding any interaction with employee unions
14
Who are considered stakeholders in a business?
Only the owners and employees
Owners, employees, customers, suppliers, government, and lenders
Only customers and suppliers
Only shareholders and managers
15
What is a franchise?
individual buys the right to operate under an established brand
A sole proprietorship that sells shares to investors
A type of government-owned business
A partnership between two companies
16
Why might conflicts arise between different stakeholders?
Because all stakeholders always have the same objectives
Stakeholders never have conflicts of interest
differences in interests, such as profit maximization vs. employee welfare
Because businesses do not need to consider stakeholder opinions
17
What is horizontal integration?
Business diversifying into unrelated markets
A company acquiring a supplier in its supply chain
company expanding into international market
merging with or taking over- same stage of production
18
What is one key advantage of a franchise for the franchisee?
Complete independence in decision-making
Full control over branding and marketing
Access to an established brand and proven business model
No initial investment required
19
Which of the following is a disadvantage of public corporations?
They focus only on profit-making
They do not receive any government funding
They can be inefficient due to lack of strict profit targets
They are managed with social objectives in mind
20
What is corporate social responsibility (CSR) in the context of stakeholders?
A company’s obligation to only maximize shareholder profits
The government’s duty to regulate businesses
company’s responsibility to consider the impact of its decisions
A term used for financial reporting
21
Aryan has $50. He can buy a book or a movie ticket with snacks. He buys the book. What is his opportunity cost?
Book
Movie ticket
Snacks
movie ticket and snacks
22
Which of the following is NOT a type of measurement of a business?
Business ownership type
Profit
Capital employed
Market share
23
What is a key advantage of a social enterprise?
It contributes positively to society while being financially sustainable
It is exempt from all government regulations
It does not have to worry about generating revenue
It focuses solely on profit maximization
24
Which of the following is a consequence of deindustrialization?
Rise in the number of factories
Shift of employment to the tertiary sector
Increase in manufacturing jobs
Growth of heavy industries
25
Which of the following is NOT a part of the primary sector
Mining ⛏️
Derivative trading 🐎
Agriculture
Fishing 🎣
26
What is not a business objective ?
Profit satisficing
Employee personal hobbies
Growth
Profit maximisation
27
Which one of these is not a role of a enterprise in economic development
Maximising profit
Business survival and growth
Employment creation
Economic growth
28
What is a cooperative?
A jointly owned business operated for the mutual benefit of its members
A public sector enterprise controlled by the government
A business owned by a single entrepreneur
A type of franchise owned by a large corporation
29
What is one of the disadvantages of a private limited company?
Less credibility compared to sole traders
Unlimited liability for shareholders
Shares can be freely traded on the stock exchange
Difficult to transfer ownership
30
How can local communities be affected by business decisions?
Only negative consequences, such as pollution
Increased job opportunities and infrastructure development
No impact at all
Businesses have no obligations towards local communities
31
What is the memorandum of association for a company
Document that states the name, address and maximum share capital.
Document that covers internal workings and control of the business
