Transcript GCSE Revision Exercise - Outwood Academy Valley

GCSE Revision Exercise
WIDER WORLD AFFECTING BUSINESS
Define the following terms;
Tariff –
Quota –
Protectionism –
Subsidy -
Tariff – a tax on imported goods
Quota – a physical limit that is put on imported goods
Protectionism – tariffs and quotas used by a country to protect its own firms
Subsidy – where a government gives money to a firm to help it lower its costs
Ethics?
Ethics?
Ethics
Write down 5 ways a firm could be ethical (can you give real examples)?
Write down 5 ways a firm may act unethically (can you give real examples)?
Which country’s flag is this?
China
How many workers today will have gone to work today in China for
Around a dollar (75p) a day?
China’s population is 1.4 billion. For each one of you, how many
Chinese people are there? (This shows the potential size of the market)
700 m
23
Which country’s flag is this?
India
What is the minimum wage in this country (per hour)?
8p per
hour
1. Is it morally correct for firms such as Nike paying a dollar a day to workers making clothes in
Asia acceptable (create a balanced argument)?
For
Creates jobs
New skills
Probably pay above the local wage rate and offer better conditions than the local factories
No one is forced to take the jobs – locals in the countries often want to work for Nike
Against
Pay a $ a day, often for a 10 hour day, whilst giving Tiger Woods a $100 million sponsorship deal
– is that morally correct?
Often move to countries where they are taking advantage of tax breaks and often lower health
and safety standards and less strict labour laws.
Expensive premium priced product, but low wages! Morally correct?
Why do countries use import protection (e.g. tariffs)? Advantages and disadvantages
Definition: A tariff is a tax on imported goods.
Reasons a country does it
To protect domestic industry, by making imports from abroad more expensive.
To raise money for the government.
There will be more local jobs.
Disadvantages
Goods will become more expensive in the country. Consumers will have to pay more money.
The consumers will have less of choice goods.
India and China are growing at around 10% per year whist the UK economy isn’t. They have very
large populations and their businesses are expanding? What are the threats and opportunities
for UK businesses? Advantages and disadvantages.
Design an answer plan;
Paragraph 1
Define economic growth –
Threats to UK business ;
Paragraph 2
Opportunities for UK business;
Conclusion
India and China are growing at around 10% per year whist the UK economy isn’t. They have very
large populations and their businesses are expanding? What are the threats and opportunities
for UK businesses? Advantages and disadvantages.
Wage rates are very low in countries such as China and India, sometimes just $1 a day. Many
goods are being manufactured there as it is cheaper, as a result many UK firms have closed
down because they can’t compete on cost. All countries use tariffs to increase the price of
imported goods from abroad in order to protect their own industries e.g. If a UK firm wants to
sell watches in India it has to pay the Indian government 58% import tax (tariff). Britain may still
specialise in high tech manufacture such as aero engines which may not be affected by Indian
and Chinese low tech manufacturing.
India has 1.1 billion consumers and China 1.4 billion, making them massive potential markets for
UK firms, although consumers are often quite poor. The Chinese and Indian economies are
growing at around 10% per year (GDP increasing), whilst the UK economy is in recession without
any growth. As the countries are becoming richer, the potential market for British exported
goods will increase. In addition, many UK firms are taking advantage of the cheap labour in
countries such as China by designing and selling their products in the UK and manufacturing
them at low cost in China.
In conclusion, the growth of China and India have resulted in many UK businesses closing down
as they can not compete on cost. However, others have been able to take advantage of their
growth by producing their products in China/India and selling to their increasingly expanding
economies.
Employment Laws
What is the maximum working week?
48 hours
Which of the following is the correct
minimum wage?
a) £4.20
b) £5.05
c) £6.11
£6.11
How many weeks a year holiday is a
worker entitled to?
4 weeks
After how many weeks must a firm give
a worker a written contract?
13 weeks
How does the UK government and EU legislation impact on UK firms?
Bureaucracy and Red Tape means a lot of rules and regulations made by government that
business have to follow.
There is complete free trade within the EU. UK firms can sell to any EU country without tariffs.
Many countries in the UK have rich consumers e.g. France & Germany. However, all the firms
from these countries can also sell their goods in the UK. Many UK firms, such as Rover have
closed down due to competition from abroad. There is also free movement of people, hence UK
firms can recruit workers from any EU country.
The EU and UK government imposes many laws on business e.g. Health and Safety legislation,
taxation, Paternity (fathers given time off work when they have a baby) & Maternity legislation
and minimum wage. All these increases the costs of business significantly making UK businesses
less competitive when compared to firms from countries such as China
Write down 3 advantages and 3 disadvantages of economic growth for a country such as China?
Advantages
•
•
•
•
Higher incomes
More jobs
Greater choice of goods
Cheaper goods
Disadvantages
•
•
•
•
More stress
More pollution
Adverse effects on the environment
Loss of local culture and traditional businesses
Environmental policies at Innocent
Innocent is a business that makes fresh fruit drinks. It tries to
live up to its name by doing more than just following the law.
Innocent try to be ethical by:
using alternative fuels and power
producing recyclable packaging
offsetting its carbon emissions by
120% each year
buying from suppliers certified by the
Rainforest Alliance
donating 10% of its profits to charity.
Why do you think Innocent have set themselves
these environmental targets?
18 of 40
© Boardworks Ltd 2007
19 of 40
© Boardworks Ltd 2007
Write down one example of how a pressure group has affected a business
Many pressure groups put pressure on businesses to be environmentally friendly e.g.
Greenpeace who campaign for renewable energy and give bad publicity to any firm that pollutes
the environment e.g. BP
Test
1. Define the term tariff. (1 mark)
2. Define the term protectionism. (1 mark)
3. Write down two ways a firm could attempt to become more ethical (or socially
responsible). (2marks)
4. Write down two advantages and two disadvantages of a country experiencing economic
growth. (4 marks)
5. Nike pay their workers around 2 dollars a day in the Philippines. Evaluate whether you feel
this is acceptable. (10 marks)