Questions and Answers
What is the primary purpose of business activity?
To meet the needs of customers by providing a product or service.
What is an important factor that influences the success of an entrepreneur?
Their ability to identify gaps in the market.
What key characteristic of successful entrepreneurs is mentioned?
Ambition and business knowledge.
What does adding value mean in the context of business activity?
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Change within a business is a static process.
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Who provided a loan to Mohammed Qamber Hussain to help finance his first restaurant?
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Business activity does not require any resources.
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What was the innovative concept of Mohammed's restaurants, Chottu Chai Wala?
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What are the four factors of production needed by businesses?
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All businesses need only financial capital to operate.
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What is added value in a business context?
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The economic problem refers to the shortage of _______ to satisfy all human wants.
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Name a barrier that entrepreneurs must overcome to turn their business ideas into reality.
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What are the key risks faced by entrepreneurs when starting a new business?
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Which of the following reasons is commonly cited for business failure?
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Match the following terms to their definitions:
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What is the role of intrapreneurs in a business?
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What is one major benefit of successful entrepreneurship to the economy?
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Which of the following is an advantage of a private limited company?
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In a public limited company, shareholders have unlimited liability.
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What does 'plc' stand for?
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The original owner of a private limited company often retains ______ interest in the company.
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What is a disadvantage of a public limited company?
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What is one reason why a private limited company might convert to a plc?
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Which of the following correctly describes the formation of a public limited company?
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Public limited companies must publish ______ and accounts annually.
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Define the term 'adding value'.
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Define the term 'entrepreneur'.
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Analyse one characteristic of successful entrepreneurs.
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Explain one barrier faced by entrepreneurs, apart from limited finance.
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Explain one example of opportunity cost for an individual planning to become an entrepreneur.
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Analyse one way a country is likely to benefit from the expansion of its business enterprises.
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Explain one role of an intrapreneur in an existing business.
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Analyse one benefit of a detailed business plan to an entrepreneur.
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Explain one limitation of business plans.
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Explain one reason why a new hairdressing business will need a factor of production of your choice.
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Explain one need that a new business must fulfil if it is to be successful.
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Analyse one way a supermarket could add value to the food and other goods it buys in.
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Explain one reason why there are so many new business enterprises providing consumer services.
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Explain one way in which an entrepreneur could overcome the barrier of having no savings to invest.
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Analyse one benefit of entrepreneurship to your country's economy.
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The ________ sector comprises businesses that are owned and operated by the government.
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Sole traders might struggle to raise __________ for expansion.
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Which of the following is not a characteristic of a partnership?
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Private limited companies cannot sell shares to the public.
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Identify one quality of successful intrapreneurs.
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Explain the term 'opportunity costs'.
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Explain two qualities Rivelino has that make him a successful entrepreneur.
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Analyse two ways the partners’ management skills contributed to the success of TFS.
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Evaluate the benefits and limitations to Wesley of the detailed business plan.
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Study Notes
Important Features of the Coursebook
- This coursebook is designed to support the Cambridge International AS & A Level Business syllabus (9609) for examination from 2023.
- The book covers the syllabus content and includes features such as:
- Learning intentions to help navigate the coursebook and indicate key concepts in each topic
- Business in context to provide real-world examples and raise important issues for discussion
- Tips to help with learning and avoiding common errors
- Activities, including case studies, evaluative and analytic questions, and opportunities for individual, pair, or group work
- Reflection questions to encourage assessment of learning and reflection on the process used to arrive at answers
- Extension: indicates content that extends beyond the requirements of the syllabus
- Key terms and formulae highlighted in the text with accompanying definitions
- Key concept links to explain how topics are integrated with key concepts in the syllabus
- Business in action: provides insight into how businesses apply key concepts
- Exam-style questions to help prepare for assessments
- Self-evaluation checklist to help learners rate their confidence in understanding the content
Introduction to Command Words
- Command words are used in the Cambridge International AS & A Level Business syllabus (9609) and exam-style questions.
- Understanding what each command word requires is essential for answering questions correctly.
- The command words and their definitions are:
- Advise: suggest a course of action and make a reasoned judgement with a supported conclusion.
- Analyse: examine in detail to show understanding, identifying elements and relationships between them.
- Assess: make an informed judgement, comparing advantages and disadvantages, and coming to a supported conclusion.
- Calculate: work out from given facts or information, showing working and including units.
- Define: give a precise meaning, explaining the term clearly.
- Evaluate: judge or calculate the quality, importance, or value of something, making a reasoned judgement with a supported conclusion.
- Explain: set out purposes or reasons, making the relationships between things evident.
- Identify: name, select, or recognise a relevant point about a business term.
- Justify: support a case with evidence and argument, making a decision or coming to a conclusion.
Getting Started with Cambridge International AS & A Level Business
- This section of the book prepares learners for the challenges and opportunities of studying Business at AS & A Level.
- Studying Business will enhance career prospects and develop valuable skills.
- The coursebook is designed for learners who have not studied Business before, as well as those who have studied it at Cambridge IGCSE level.
- The Cambridge International AS & A Level Business syllabus requires a higher level of understanding and application than Cambridge IGCSE.
- The skills required include knowledge, application, analysis, and evaluation, with more emphasis on analysis and evaluation at AS & A Level.
- Wide reading around business issues, both nationally and internationally, is essential.### Differences between AS Level and A Level
- More subject content is studied at A Level than at AS Level
- Assessment skills are weighted differently, with more emphasis on subject knowledge and understanding at AS Level and higher-order skills of analysis and evaluation at A Level
Resources Needed
- This coursebook and accompanying workbook
- Means of keeping notes, exercises, assignments, and other written resources (e.g. file paper, laptop, or tablet computer)
- Copy of the syllabus and past exam papers (becomes more important as the course progresses)
- Access to business news reports and the internet
Mathematical Concepts in Business
- Calculating and interpreting percentages and percentage changes
- Calculating and interpreting ratios
- Interpreting tables of data, pie graphs, line graphs, and bar charts
- Drawing or completing simple line graphs
- Reading off data from a line graph
- Basic arithmetic operations (addition, subtraction, multiplication)
Skills Needed
- Determination and ability to research information
- Willingness and ability to read a variety of written sources (e.g. coursebook, newspapers, business case studies)
- Decision-making ability to form a judgement and support it
- Enthusiasm and ability to discuss issues with others
- Reflecting on what is said during discussions to help business managers make the best decisions
Assessment Objectives
- AO1: Knowledge and understanding of business concepts, terms, and theories
- AO2: Application of business concepts, terms, and theories to problems and issues
- AO3: Analysis of business problems, issues, and situations
- AO4: Evaluation of evidence to make reasoned judgements and present substantiated conclusions
Key Concepts in Cambridge International AS & A Level Business
- Change: the only constant, and the need for businesses to adapt
- Context: understanding the basis for every business decision
- Decision-making: affecting all levels in a business
- Enterprise: the ability to seek out and develop business opportunities
- Innovation: enabling businesses to re-invent themselves and stay ahead of the competition
- Strategy: knowing where you are, where you want to get to, and how to get there
Unit 1: Business and its Environment
- Understanding the nature and purpose of business activity
- Identifying and analysing how businesses are set up, classified, and influenced by external factors
- Recognising the importance of adding value to resources and meeting people's needs
The Nature of Business Activity
- Businesses aim to satisfy people's needs by using resources to produce goods and services
- Businesses operate in a constantly changing world, but the purpose of business owners and managers remains the same: to add value to resources while meeting people's needs
- The factors of production needed by businesses include land, labour, capital, and enterprise
- Adding value is essential for businesses to survive and make a profit
Economic Problem and Opportunity Cost
- The economic problem is the fundamental problem of choice due to limited resources and unlimited wants
- Opportunity cost is the value of the next best alternative given up when a choice is made
Dynamic Business Environment
- The business environment is constantly changing, making it risky to set up and operate a business
- Changes in the business environment include new competitors, legal changes, economic changes, and technological changes
- A business plan should be flexible to adapt to these changes### Starting a Business
- Sufficient capital is essential to inject into a business at start-up to operate during the initial months when cash flow from customers may be slow
- Establishing good relations with banks can provide short-term cash problem solutions through overdraft extensions
- Effective credit control over customers' accounts ensures timely payment
Entrepreneurial Skills
- Most entrepreneurs lack management skills, including leadership, decision-making, cash handling, planning, and marketing
- Entrepreneurs require innovation, commitment, self-motivation, multi-skilling, leadership, self-confidence, and risk-taking qualities
- Entrepreneurs must be willing to work hard, have ambition, and be keen to learn and adapt
Types of Businesses
- Local businesses operate in small, well-defined parts of a country and do not aim to expand nationally or internationally
- National businesses have branches or operations across a country but do not operate internationally
- International businesses sell products in more than one country, and multinational businesses have operations in more than one country
The Role of Entrepreneurs and Intrapreneurs
- Entrepreneurs create new business ventures, often based on innovative product ideas or services
- Intrapreneurs demonstrate entrepreneurial qualities within an existing business, encouraging innovation and creativity
- Entrepreneurs and intrapreneurs require innovation, commitment, self-motivation, and risk-taking qualities
Barriers to Entrepreneurship
- Lack of a business opportunity, sufficient capital, and good locations can be barriers to entrepreneurship
- Competition and lack of a customer base can also hinder business success
- Entrepreneurs must address these barriers to turn their business ideas into reality
Business Risk and Uncertainty
- Business risk can be measured and calculated, whereas business uncertainty is unforeseen and unpredictable
- Business planning can help reduce business risk, but uncertainty can still occur
The Role of Enterprise in a Country's Economic Development
- Entrepreneurs create employment opportunities, stimulate economic growth, and promote innovation and technological change
- Enterprise can lead to increased output, consumption, and tax revenues, improving living standards and national competitiveness
- Entrepreneurship can also aid personal development, increase social cohesion, and promote exports
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Assess your understanding of business concepts with this quiz based on the Cambridge International AS & A Level Business Coursebook by Peter Stimpson and Alastair Farquharson.