Business in the real world
Edexcel GCSE Business Studies revision on Business in the real world. Aligned to the Pearson Edexcel GCSE Business 1BS0 specification. This bank has 10 practice questions on this topic.
Sample questions (3 of 10)
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Question 1
Which of these is the BEST definition of an entrepreneur?
- A) A senior manager at a large company
- B) Someone who takes a financial risk to start a new business
- C) Anyone who works for themselves
- D) An employee who suggests new ideas
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Answer: Someone who takes a financial risk to start a new business
Entrepreneurs combine factors of production (land, labour, capital, enterprise) and accept the risk of failure in exchange for the potential reward of profit. Working for yourself = self-employed; risking money to start a NEW business with the aim of growing it = entrepreneurship.
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Question 2
A small bakery is set up as a sole trader. What is the BIGGEST disadvantage of this?
- A) It has too many shareholders
- B) Profit must be shared with partners
- C) The owner has unlimited liability
- D) Annual accounts must be published
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Answer: The owner has unlimited liability
Unlimited liability means the owner's personal assets (house, car, savings) can be claimed by creditors if the business fails. Compare with a private limited company (Ltd) where the owner's liability is limited to the value of their shares. This is THE classic exam answer.
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Question 3
Which of these is a feature of a PUBLIC limited company (PLC)?
- A) Owned by the government
- B) Shares are sold on the stock exchange to the public
- C) Always larger than a private limited company
- D) Cannot make profit
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Answer: Shares are sold on the stock exchange to the public
PLC (e.g. Tesco, Marks & Spencer) sells shares on the London Stock Exchange — anyone can buy. Private Ltd (e.g. JCB, Dyson) has shares but they're privately held. PLCs raise huge amounts of capital BUT lose control (hostile takeovers, short-term shareholder pressure) and must publish detailed accounts.
Want to test yourself on the remaining cards for this topic?
7 more questions on Business in the real world — plus mistakes tracking and spaced repetition across the whole Business Studies spec.