EDEXCEL GCSE BUSINESS STUDIES REVISION CHECKLIST. Name:

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1 EDEXCEL GCSE BUSINESS STUDIES REVISION CHECKLIST Name:

2 UNIT 5: Introduction to Economic Understanding Topics Areas to Revise Unit 5.1- How can I start to think like an economist? What trade-offs exist? The concept of a trade-off and its relevance to scarcity and choice. That decisions made by individuals, businesses and the government involve sacrifices or trade-offs. How a trade-off can be measured in terms of the benefits of goods/services forgone by making a particular decision. The concept of opportunity cost and apply it to a variety of scenarios. Does raising or lowering price always work? The basic purpose of the tactic of increasing and reducing price, the result on demand and the concept of price sensitivity. That one of the aims of changing price is to increase revenue through influencing how many products are purchased. That the success of raising revenue as a result of changing price depends on how consumers react to the change. How the price sensitivity of a product might depend on the number and closeness of substitutes available. Do all stakeholders have the same perspective? Consider an issue/ event from a variety of perspectives, allowing conflicts of interest to be identified between different stakeholder groupings. That, in certain circumstances, some stakeholder groups will be in a stronger position than others and will therefore be able to influence decision making. Are there any hidden costs or benefits? Positive and negative externalities and be able to give examples. To apply the concepts of negative and positive externalities to a variety of real-world scenarios and assess the extent to which any externalities present may affect different stakeholder groups Unit 5.2 Risk or Certainty? How can success be measured? Competitiveness and competitive advantage as factors contributing to business success. That business success can be measured in different ways profits, revenue, market share That wider social success can also be measured by the business s record on social, environmental and ethical Need further revision Revised fully

3 responsibility. What causes business failure? The extent to which factors can cause a business to lose competitiveness: poor marketing mix, loss of productivity, increased competition, changing market conditions. The importance of cashflow to the success of the business and how poor cash-flow could lead to business failure (insolvency). What problems does the economy face? How the changing level of demand can affect a business s performance and the risks it faces. The causes and effects of inflation. Impact of inflation on the consumer price index (CPI) and cost of living. The costs of unemployment, both to the individual and to the wider economy/society. The effects that internal and external shocks will have on the economy, for example changes in the housing market and global economy. Commodity prices (these effects will be considered at a basic level only). How important are exchange rates? The concept of imports and exports in international trade. What an exchange rate is and identify whether or not a given currency has strengthened or weakened. The effect changing exchange rates have on export and import prices. The extent to which differing businesses are affected by exchange rate movements. Can the government solve economic and social problems? How the Bank of England uses interest rates to influence economic activity. The main ways in which changes in government spending and taxation affect the economy and social issues such as health, education, crime and poverty The extent to which changes in government spending and taxation can be used to tackle current social problems such as child poverty and binge drinking Unit 5.3 Big or Small? How do businesses grow? How businesses can develop through a process of internal growth, such as changing the marketing mix, innovation, research and development. How businesses can grow externally through merger/ takeover. Why do businesses grow? The benefits that businesses may generate through growth such as economies of scale and improved market power over suppliers and customers. (a detailed study of economies of scale will not be required)

4 The possible drawbacks of growth (diseconomies of scale, lack of flexibility etc). Monopoly power good or bad? That monopoly power means having some degree of control over the market and that this control can have positive and negative effects on stakeholder groups. That in certain circumstances monopolies can be advantageous to society. The extent to which any large business with market power may be able to act in a way that may damage the interests of some of its stakeholders. Can big business be controlled? The concept of self-regulation and whether or not big business can self-regulate effectively without the need for government intervention. The basic role of the competition authorities in the UK and the EU, such as the Competition Commission, and explain the reasons why these authorities investigate proposed acquisitions and existing businesses. the extent to which pressure groups can prevent the exploitation of stakeholder groups by big business (for example Greenpeace, Nestlé Baby Milk Action, Tescopoly) Unit 5.4 Is growth good? What is growth? To define economic growth and understand that it is measured by examining changes in Gross Domestic Product (GDP). The factors that cause economic growth to occur such as investment in both training and machinery, along with infrastructure improvements. Does growth increase the standard of living? How GDP can be used to measure the standard of living in a country and the extent to which it is an effective measure of the standard of living. That the standard of living can also be indicated by measures such as infant mortality rates, life expectancy and literacy rates. Can growth be bad? Negative factors associated with economic growth such as pollution, congestion, the use of non-renewable resources and waste. The effect that negative externalities will have on society and future generations.

5 Can growth be sustainable? The concept of sustainable economic growth The benefits and drawbacks of using renewable resources for both businesses and the wider economy Ways in which businesses can become more environmentally, socially and ethically responsible and the reasons why businesses adopt such policies. What can governments do? How governments can use taxes, subsidies, legislation and regulation to protect the environment The effects these policies will have on businesses. Unit 5.5 Is the World fair? Is everybody equal? The difference between types of inequality both within the UK and across national boundaries. How to identify signs of absolute and relative poverty and be able to make judgements as to a person s standard of living based on source information. Can international trade help? The costs and benefits of international trade to a less economically developed country (LEDC). How the Single European Market has led to improvements in standards of living within the EU. Ways in which free trade is restricted (eg tariff, nontariff barriers and quotas) and the reasons why countries may impose such restrictions. The role multi-national corporations can have and their benefits and drawbacks in less developed countries. Is there any other help? The effectiveness of any government efforts to address world poverty and any trade-offs that may ensue from their actions. The role that charities and other non-governmental organisations (NGOs) have in reducing international poverty.