What is Insurance?
Insurance offers financial protection against possible loss and aims to restore the insured person to their financial position before the loss.
What is Compensation?
Compensation is a financial payment made to the insured when a covered loss occurs.
Name and explain the 5 Principles of Insurance.
1. Insurable Interest: You must benefit from the insured item's existence and suffer from its loss.
2. Utmost Good Faith: All relevant information must be truthfully disclosed.
3. Indemnity: The insured should not profit from compensation.
4. Subrogation: After compensation is paid, the insurer takes ownership of the damaged property.
5. Contribution: If multiple insurers cover the same loss, they share the compensation cost proportionally.
Name the 3 insurance terms (parties).
1. First Party: The insured person.
2. Second Party: The insurance company.
3. Third Party: Anyone/Anything suffering a loss due to the insured (first party).
Define No Claims Bonus and Loading in insurance.
No Claims Bonus: A discount on the premium given if no claims are made.
Loading: An additional amount added to the premium due to increased risk.
How can you reduce risk for insurance purposes?
Use security measures such as CCTV, monitored alarms, fire alarms, car alarms, and off-street parking to reduce risk.
Name the main insurance-related occupations and their functions.
Broker: Suggests the best insurance for a customer.
Agent: Sells insurance on behalf of one company.
Actuary: Calculates premiums based on risk.
Loss Adjuster: Investigates claims and decides compensation.
What is Assurance and what are its types?
Assurance provides financial protection against an event that will certainly happen (e.g., death).
- Whole Life: Pays out after death.
- Term Policy: Pays off a mortgage or debt if death occurs within a set term.
- Endowment: Pays the insured after a certain date if still alive, or upon earlier death.
Name and explain the main insurance documents.
Claims Form: Used to apply for compensation after a loss.
Proposal Form: An application for insurance.
Policy: Details what is covered and the compensation payable.
Name internal sources of business ideas.
Internal sources include brainstorming sessions, intrapreneurship, R&D departments, and input from sales personnel.
List the stages of the Product Development Process.
1. Idea Generation
2. Product Screening
3. Concept Development
4. Feasibility Study
5. Prototype
6. Test Marketing
7. Product Launch
Name three roles of enterprises in social, financial, and cultural areas.
Social: Provide employment, raise awareness of social issues, offer services.
Financial: Provide employment, produce goods/services, create tax revenue.
Cultural: Provide employment, create entertainment, promote art and culture.
Define Enterprise, Entrepreneur, Import Substitution, Non-profit, and Brainstorming.
Enterprise: Turning new ideas into actions using creativity.
Entrepreneur: A person who takes the initiative and risk to start and run a venture.
Import Substitution: Replacing imported goods with those produced locally.
Non-profit: An organization using funds for social or cultural benefits, not profit.
Brainstorming: A group technique to generate many ideas.
What is the difference between a characteristic and a skill?
A characteristic is an innate trait (e.g., being innovative), while a skill is developed over time (e.g., time management).
Name three characteristics of an entrepreneur.
Innovative: They create new ideas and products.
Determined: They persist despite challenges.
Realistic Risk Taker: They take calculated, probable risks.
Name three skills of an entrepreneur.
Time Management: Efficient use of time.
Opportunity Identification: Spotting beneficial new ideas or markets.
Money Management: Handling finances effectively.
List three benefits and three drawbacks of self-employment.
Benefits:
- Keep all profits
- Be your own boss
- Flexible working hours
Drawbacks:
- Risk of losing money
- Time-consuming
- Income not guaranteed
What is a shareholder?
A shareholder is someone who owns part of a company by holding shares and may receive dividends.
Name internal and external sources of business ideas.
Internal: Brainstorming, intrapreneurship, R&D, sales personnel.
External: Competitors, imports, customer feedback, market research.
What are the seven stages of the Product Development Process in order?
1. Idea Generation
2. Product Screening
3. Concept Development
4. Feasibility Study
5. Prototype
6. Test Marketing
7. Product Launch
Define work, employment, employees, employers, and the differences between work and employment.
Work: Any productive activity requiring effort.
Employment: Paid work.
Employees: Individuals working for payment.
Employers: Those who pay employees.
Differences:
- Work may be unpaid; employment is paid.
- Employment involves a contract and legal rights; work may not.
Name three benefits of employment.
1. Regular income
2. Development of skills and talents
3. Opportunities to travel or gain experience
Define unemployment and labour force.
Unemployment: People willing and able to work but unable to find jobs (excluding unable, retired, or students). They may receive jobseeker's benefit.
Labour Force: Individuals aged 16-66 who are able and willing to work.
What is volunteering and why do people volunteer?
Volunteering: Working without pay to support a cause.
People volunteer because they enjoy the work, have the skills and time, and feel passionate about the cause.
Outline the benefits of volunteering for individuals, organizations, and society.
Individuals: Gain new skills, improve resumes, show initiative, make new friends.
Organizations: Gain new ideas and expertise, improve reputation, get more dedicated volunteers.
Society: More community services, increased cooperation, reduced government burden, reduced social isolation.
Define rights, responsibilities, and their classification (legal, social, environmental, ethical).
Right: Something you are entitled to.
Responsibility: Something you should do.
Classifications:
- Legal: Set by law.
- Social: Benefiting society.
- Environmental: Protecting the environment.
- Ethical: Based on moral principles.
Define industrial relations, trade union, industrial action, and shop steward.
Industrial Relations: The relationship between employees and employers.
Trade Union: Represents and protects workers' rights.
Industrial Action: Measures like strikes, go-slow, overtime bans to resolve disputes.
Shop Steward: A trade union representative in the workplace.
Name three rights and three responsibilities of an employer.
Employer Rights:
1. Hire suitable staff
2. Expect respect for property
3. Run the business as they see fit (within law)
Employer Responsibilities:
1. Pay fairly for work done
2. Treat all employees equally without discrimination
3. Provide a safe and healthy workplace
Name three rights and three responsibilities of an employee.
Employee Rights:
1. Proper pay
2. Adequate rest
3. Safe, healthy working conditions
Employee Responsibilities:
1. Do not bully or discriminate
2. Wear protective gear if required
3. Perform duties as stated in their contract
Name two acts that protect employees in the workplace.
Unfair Dismissals Act (1977-2015): Ensures employees aren't fired without valid reasons.
Employment Equality Acts (1998-2015): Makes discrimination (age, gender, race, etc.) illegal in employment.
What is market research?
Market Research is the collection, recording, and analysis of information about consumer preferences for goods and services.
Why is market research conducted?
To identify products customers want, stay ahead of competition, set accurate prices, and prevent business failure.
What are the benefits of market research?
It helps develop new products, satisfy customers, find appropriate price ranges, outcompete rivals, increase sales, and achieve better customer reviews.
Define field research.
Field Research (Primary Research) involves collecting first-hand, up-to-date information directly from consumers, using methods like surveys, focus groups, and observation. It’s relevant but can be time-consuming and costly.
Define desk research.
Desk Research (Secondary Research) uses previously gathered information from sources like the internet, newspapers, magazines, CSO data, and sales reports. It’s cheaper and faster but may be less relevant or current.
What is marketing?
Marketing is the process of identifying and satisfying customer needs and wants profitably.
What is market segmentation?
Market Segmentation is dividing the market into distinct groups of consumers and targeting products/services to their specific needs.
What is a target market?
A target market is a group of consumers a business aims its product or service at.
What is the marketing mix?
The marketing mix (4 Ps) includes:
- Product: The good/service offered.
- Price: The amount charged.
- Place: Distribution channels to reach consumers.
- Promotion: Advertising and other tactics to inform and persuade consumers.
Explain the Average Clause in insurance.
Average Clause: (Amount Insured ÷ Actual Value) × Claim = Reduced Compensation if under-insured.
What is the role of sales personnel in generating business ideas?
Sales personnel gather feedback from customers, hold meetings, and communicate customer needs and market trends back to the company.
Define Effective Demand and Inflation.
Effective Demand: The quantity of a product consumers are willing and able to buy.
Inflation: A sustained increase in the general level of prices.
Define Market, Final Markets, Factor Markets, and Commodities Markets.
Market: Where buyers and sellers meet to trade.
Final Markets: Where finished goods are sold.
Factor Markets: Where production factors (land, labor, capital, enterprise) are bought/sold.
Commodities Markets: Where raw materials are traded.
Explain four aspects of consumer behavior and define demand.
Consumer Behavior:
1. They choose cheaper options when products are similar.
2. They aim to maximize utility.
3. They strive for maximum satisfaction.
4. Law of Diminishing Marginal Utility: Satisfaction decreases with each additional unit.
Demand: The quantity consumers are willing and able to buy at a given price.
State the law of demand and the law of supply.
Law of Demand: As price rises, demand falls; as price falls, demand rises.
Law of Supply: As price rises, supply rises; as price falls, supply falls.
Define economics, economic resources, and rational choices.
Economics: The study of how those with limited resources satisfy wants.
Economic Resources: Inputs (land, labor, capital, enterprise) used to produce goods/services.
Rational Choices: Decisions made where expected benefits outweigh expected losses.
Describe the four factors of production with examples and rewards.
Land: Natural resources (oil, fields). Reward: Rent
Labor: Human effort (engineers, farmers). Reward: Wages
Capital: Man-made aids (machinery, buildings). Reward: Interest
Enterprise: Combining factors to create products. Reward: Profit
Define gearing, equity capital, debt capital, and gearing ratio.
Gearing: The proportion of finance from debt vs. equity.
Equity Capital: Money from shares and reserves.
Debt Capital: Money borrowed (loans, bonds).
Gearing Ratio: Debt:Equity ratio.
Explain profitability and define gross margin, net margin, and return on capital employed.
Profitability: Analyzing profits relative to sales or capital.
Gross Margin: (Gross Profit ÷ Sales)×100.
Net Margin: (Net Profit ÷ Sales)×100.
Return on Capital Employed: (Net Profit ÷ Capital Employed)×100.
Explain liquidity and define the Working Capital Ratio and Acid Test Ratio.
Liquidity: A firm’s ability to pay short-term debts.
WC Ratio: Current Assets ÷ Current Liabilities.
Acid Test Ratio: (Current Assets – Stock) ÷ Current Liabilities.
What is ratio analysis and define gearing simply.
Ratio Analysis: Using ratios to analyze a company’s performance.
Gearing: Measures how much finance comes from debt vs. equity.
What interests do different stakeholders have in profitability and liquidity?
Shareholders: Interested in profitability (returns on investment).
Lenders: Interested in liquidity (repayment capacity).
Employees: Interested in both for job security and fair pay.
Outline the layout of a Trading, Profit and Loss Account.
Sales
Less Cost of Sales (Opening Stock + Purchases + Carriage Inwards – Closing Stock) = Cost of Sales
Sales – Cost of Sales = Gross Profit
Less Expenses (Rent, Telephone, Wages, Light & Heat, Depreciation) = Net Profit
Less Dividends
Add Opening Reserves
= Retained Profit (Closing Reserves)
What is a demand curve and name three factors affecting demand.
Demand Curve: A graph showing the relationship between price and quantity demanded.
Factors:
1. Complementary Goods
2. Seasonal Changes
3. Advertising
Differentiate between normal and inferior goods, and define supply and the supply curve.
Normal Goods: Demand rises as income rises.
Inferior Goods: Demand falls as income rises.
Supply: Quantity producers are willing to sell at a given price.
Supply Curve: A graph showing the relationship between price and quantity supplied.
Name three factors affecting supply and define equilibrium.
Factors Affecting Supply:
1. Environmental Conditions
2. Technology
3. Cost of Production
Equilibrium: The price point where quantity supplied equals quantity demanded.
Why use Double Entry Bookkeeping, Trial Balance, Profit and Loss Account, and Balance Sheet?
Double Entry: Accurate financial records.
Trial Balance: Checks accuracy of ledgers.
Profit & Loss Account: Shows profitability, aids decision-making.
Balance Sheet: Shows financial position (assets, liabilities, equity).
List the main rights and responsibilities of consumers.
Rights:
- Merchantable quality goods
- Redress (refund, repair, replacement)
- Secure, confidential transactions
Responsibilities:
- Avoid false economies
- Avoid impulse buying
- Compare prices
What are economic indicators and define inflation, national income, and economic growth?
Economic Indicators: Data that reflect changes in the economy.
Inflation: Sustained rise in general price levels.
National Income: Total output of a country’s goods/services (GDP or GNP).
Economic Growth: Change in national income year-on-year.
What is government economic policy?
Government Economic Policy: The guidelines and actions taken to influence the economy, combat inflation/unemployment, and promote sustainable growth.
Name and describe two government economic policies.
Industrial Policy: Encourages development of primary, secondary, and tertiary sectors, fosters indigenous business, and attracts FDI.
Fiscal Policy: Uses taxation and government spending to influence the economy, redistribute wealth, and promote certain behaviors.
List the pros and cons of government economic policies.
Pros:
- Encourages industry, FDI
- Corporate tax revenue can reduce personal tax
Cons:
- Property taxes burden homeowners
- Higher minimum wage raises employer costs
- Social welfare taxes increase worker burden
Discuss the positives and negatives of economic growth.
Positives:
- Higher incomes and living standards
- Less emigration, possibly more immigration
- More tax revenue for infrastructure
Negatives:
- Environmental damage
- Possible over-reliance on certain industries
- Overpopulation due to longer life expectancy
What is sustainable development?
Sustainable Development: Meeting current needs without compromising future generations, achieved through resource conservation, recycling, and renewable energy.
What are business ethics?
Business Ethics: Moral principles guiding a company’s behavior. Responsibilities include quality goods, honest dealings, fair wages, safe conditions, environmental protection, and paying taxes.
Differentiate between visible and invisible imports.
Visible Imports: Physical goods brought into a country (e.g., oil, bananas).
Invisible Imports: Foreign services (e.g., tourism, foreign entertainers).
Why does Ireland import goods?
Reasons:
- Climate unsuitable for certain crops
- Consumer desire for variety
- Lack of raw materials
- Small domestic market making some production uneconomic
Name benefits and challenges of international trade for Irish businesses.
Benefits:
- Larger markets increase sales
- Access to essential imported raw materials
Challenges:
- High transport costs (island location)
- Language barriers with international customers
What are barriers to trade and why are they imposed?
Barriers: Tariffs, quotas, embargos.
They protect domestic industry, jobs, and national security. Enterprise Ireland assists with exporting.
Differentiate Balance of Trade and Balance of Payments.
Balance of Trade: Visible Exports – Visible Imports.
Balance of Payments: Total Exports – Total Imports (includes both visible and invisible trade).
Describe the impacts of globalization on companies, consumers, economy, and society.
Companies: More competition, access to bigger markets, risk of foreign takeover.
Consumers: Greater product variety.
Economy/Society: Job creation, possible decline of local firms, increased multiculturalism, potential reduction in local culture.
What is the European Union (EU)?
The EU is a trading bloc that removes trade barriers among member states, ensures justice and equality, and promotes economic and social development through the single market and common policies.
Name the main EU institutions and their roles.
Commission: Proposes and implements legislation, budget.
Council: Sets direction and priorities of the EU.
Parliament: Elected representatives, oversee the Commission and budget, represent citizens.
What are the economic benefits and challenges of the EU for Ireland?
Benefits:
- Single Market access without tariffs
- Eurozone removes currency exchange risks
- EU grants for infrastructure
Challenges:
- Common Fisheries Policy allows foreign fishers in Irish waters
- Greater contributions to the EU budget
- Increased complexity post-Brexit
List the social benefits and problems of EU membership.
Benefits:
- Free movement for work, travel, study
- Higher living standards
- Better infrastructure and services
- Strong consumer rights
Problems:
- Higher product costs due to regulations
- Refugee crises
- Language barriers for competitiveness
How does Brexit impact Ireland?
Brexit reintroduces tariffs and customs checks with the UK, raising trade costs and complexity. Quotas may limit certain imports, affecting Irish export markets.
Name three rights of a borrower and two rights of a lender.
Borrower Rights:
1. Know the APR
2. Know penalties for late payment
3. Know installment amounts and schedules
Lender Rights:
1. Stress test borrower’s repayment ability
2. Check borrower’s credit history
What are MABS and ISI?
MABS: Money Advice and Budgeting Service, offering guidance on debt management.
ISI: Insolvency Service Ireland, assisting individuals with personal insolvency issues.
Explain different types of life assurance.
Whole Life: Pays out on death.
Endowment: Pays out if alive at a certain date or earlier death.
Term: Covers a specified term, often used to clear debts (e.g., mortgage) if death occurs within that term.
How do you apply the Average Clause?
Average Clause Formula: (Insured Value ÷ Actual Value) × Claim Amount = Reduced payout if under-insured.
Name and explain key consumer protection acts.
Consumer Protection Act 2007: Bans misleading, aggressive, and prohibited practices.
Sale of Goods and Supply of Services Act 1980: Goods must be of merchantable quality, fit for purpose, as described, and match samples.
Summarize economics and economic resources.
Economics: The study of resource allocation to satisfy unlimited needs/wants.
Economic Resources: Factors (land, labor, capital, enterprise) used to produce goods/services.