Externalities The spillover effects which influence to someone else, 3rd party. Positive externalities These are very acceptable. These occurs when there is some satisfaction for third party. Negative externalities These are regarded as being desirable because it make external cost which influence the third party negatively. The strengths of the market economy Profit signaling mechanism leads to..

Edexcel GCE(A-level) Economic B 2019. 5. 21. 02:07

Providing credit Individual People usually borrow money to buy house, car, or wedding. Business In general, businesses borrow money because big projects need huge payment to implement Government Government may use loan to cover deficit or carry out a civil engineering project. Interest rates Savers receive interest through their saving account. Borrowers pay interest rate. Their interest rate wi..

Edexcel GCE(A-level) Economic B 2019. 5. 21. 02:02

Market research Purpose of market research It helps to forecast future sale and revenues Entrepreneurs are able to know whether the price which people want pay covers cost of production. Business can explore new possibilities in the market and check whether a business idea is able to survive and stand out from rival. Eventually it may help to get unique selling point Primary research Survey Open..

Edexcel GCE(A-level) Economic B 2019. 5. 21. 02:00

Introducing the market The limitations of the supply and demand model l It is a simplified set of complex events that hard to understand. l It assumes that businesses, individuals and other organisations have full information. In fact, we almost never have complete information. l Another simplified assumption is that all markets are competitive. Functions of the price mechanism to allocate resou..

Edexcel GCE(A-level) Economic B 2019. 5. 21. 01:44

The wider economic environment Impact of interest rates Impact on business when interest rate increases: 1. They are less likely to borrow money to expand due to higher cost of borrowing. 2. They will face falling demand which reduces profits and eventually employment. Impact on consumer when interest rate increases 1. They are less likely to borrow money which reduces spend. 2. Due to higher mo..

Edexcel GCE(A-level) Economic B 2019. 5. 21. 01:21

Role of an entrepreneur in the economy Making decision to operate, expand and develop a business Entrepreneurs take many decisions so that they need a good comprehension about their market and idea. They must make plan about orgnising resources needed and monitoring production process Very importantly, entrepreneurs are usually creating jobs and facing consumer needs in the market place Adding v..

Edexcel GCE(A-level) Economic B 2019. 5. 18. 21:26

How business can be succeeded Creative destruction (structural change) It refers the ways that create new products and destroy old one by dynamic-technological innovations. These innovations also cut cost and eventually price too. It enables to be superior to existing products that were attractive to most of consumers. Thus, many businesses have relied on innovation to capture market even though..

Edexcel GCE(A-level) Economic B 2019. 5. 13. 04:46

Stakeholder conflicts It refers people who interest in the specific business. Each stakeholder has difference objective therefore, there are conflicts between stakeholders. Between: Employer and local community or government Employer may increase capacity of factory to expand business. Nevertheless, it can be opposed by local community and government because this expansion makes environmental da..

Edexcel GCE(A-level) Economic B 2019. 5. 10. 00:18