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Term 1 Fundamentals
Barter, Role of Money, Types of Business, Ethical and Unethical e.t.c
| Question | Answer |
|---|---|
| What is Barter? | Bartering is the exchange of goods and services without the use of money. |
| What is double coincidence of wants? | This is when two people want what each other has to offer |
| What are the advantages of barter? | 1. Possible if there is a double coincidence of wants. 2. Can help get rid of surplus production. 3. Laid the foundation the method of trading we use today. 4. Increases the availability of goods. |
| What are the disadvantages of barter? | 1. Not possible if there isn't a double coincidence of wants. 2. There is often a lack of an equitable exchange rate. 3. Often difficult to divide fairly. 4. IT doesn't allow for the storage of wealth over time. |
| What is money? | Money is a medium of exchange that is generally accepted |
| What are the characteristics of money? | Portability Durability Acceptability Scarcity Divisibility |
| What are the functions of money? | As a medium of exchange As a unit of account As a store of value As standard of differed payments |
| What are instruments of exchange? | Anything used as a means of transaction to take place. |
| What is a bill of exchange? | An order from a person/organization (The drawer) to another (The drawee) agreeing to make payment in the future. The payment will be paid on presentation of the bill for payment. |
| What is the private sector? | The private sector consists of small, medium, and large businesses that are owned by Entrepeneur. |
| What is the public sector? | The public sector consists of enterprises owned and run by the government. |
| What are the motives for public sectors? | To provide goods and services To cater for the population Limited or no competition |
| What are the motives for private sectors? | To earn profit To cater for target market To provide for customer needs |
| What is nationalization? | Movement from Private to Public Sector |
| What is privatization? | Movement from Public Sector to Private sector |
| What is sole trader? Advantages and disadvantages of sole trader? | It is when one person runs a business. Advantages: Less Capital is required Profits do not have to be shared Speedy decision making Disadvantages: Narrow range of skills Hard to get capital Ill health may affect the running of the business |
| What is partnership? Advantages and disadvantages of partnership? | It is when two or more persons run a business. (2-20) Advantages: Risks and Responsibilities shared More partners more capital More informed decision making Disadvantages: Disagreements may arise Limit for partners Slower decision making |
| What are co-operatives? Advantages and disadvantages of co-operatives? | A co-operative is a member-owned business run for mutual benefit. Members share profits and have equal votes. It promotes fairness, community growth, and cost savings but may face slow decisions, limited capital, and internal conflicts. |
| What are franchises? Advantages and disadvantages of franchisees? | A franchise lets someone (the franchisee) run a business using a company’s (franchisor's) brand and system. Advantages: Brand recognition and support. Disadvantages: high costs, limited freedom, ongoing fees, and risk if the brand’s image is damaged. |
| What are private limited companies? Advantages and disadvantages of private limited companies? | A private limited company is a business owned by shareholders with limited liability. Advantages limited liability and easier capital raising Disadvantages More regulations, costly setup, limited share transfer, and less privacy. |
| What are public limited companies? Advantages and disadvantages of public limited companies? | A public limited company (PLC) is a business owned by shareholders, where shares are traded on the stock exchange. Advantages: Can raise large capital, Limited liability Transferable shares Disadvantages: Costly setup, public scrutiny, risk of takeover |
| What is a limited and unlimited liability company? | A limited liability company protects owners' personal assets; they are only liable up to their investment. An unlimited liability company has no asset protection; owners are fully responsible for all business debts, even beyond their investment. |
| What are the types of economic systems? | 1. Subsistence 2. Command 3. Free Market 4. Mixed |
| Define each economic system | Traditional economy: Mainly uses bartering Command economy: Government controls resources and production. Market economy: Decisions made by individuals and businesses. Mixed economy: Combines government and private control. |
| What are the functional areas of a business | Production Marketing Finance Human Resources Research and Development |
| What is business ethics? | Moral principles guiding business conduct |
| 3 examples of unethical business practices | Misleading advertising Not paying tax Unethical Disposal of Waste |
| What is the role of the finance sector? | Overseeing of finances Keeping and presenting financial records |
| What is the role of the marketing sector? | To identify customer requirements and meeting them To do market research To advertise To Promote activities |
| What is the role of the HR sector | To create job advertisements Selecting candidates for interview Training Termination of an employee contract |
| List the types of stakeholders | Managers Consumers Suppliers The government Owners Employees Future Generation The environment |
| Employees as stakeholders | Their stake is their job and the wages that come with it. They provide labor in exchange for their wages |
| Consumers as stakeholders | Customers benefit from good quality goods and services that are sold by a company at an affordable price and provide feedback. |
| Suppliers as stakeholders | Suppliers will benefit from the buying of their products. They provide raw materials, components and services that later allows the business to create their own products |
| What is the role of a stakeholder in business? | To play a part in the decision-making process in an organization. |
| What are the types of stakeholders that make decisions? | External stakeholders are the people outside the business who have an interest how the business does Internal stakeholders are the people inside who work for the business and help carry out its operations |
| What are the roles of employees as stakeholders? | Employees, as stakeholders, help the business succeed by doing their work, supporting company goals, sharing ideas, and making sure customers are satisfied. |
| What is the role of suppliers as stakeholders? | Suppliers, as stakeholders, provide the goods and services a business needs to operate and help ensure quality and timely delivery so the business can serve its customers well. |
| What is the role of the government as stakeholders? | The government, as a stakeholder, creates laws and regulations to ensure businesses operate fairly and safely, protects consumers, and supports economic growth. |
| What are three measures emplaced by the Caribbean government for consumer protection. | Consumer Protections Act: These are rules that protect buyers from unfair treatment, like false ads or poor-quality goods. Privacy Laws: protect consumers’ personal data from misuse. Fair Trading Act: prevents businesses from using misleading ads |
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