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Flashcards in Business knowledge test one Deck (23):
1

Define market

This is where buyers and sellers exchange goods and services.

2

Define business

They provide goods and services to the public. these can operate on the pubic, private and third sectors.

3

Define goods

Physical objects that a business sells to its customers

4

Define services

Non-physical objects that a business sells to its customers

5

Define products

Goods and services

6

Define consumer durable

Goods that last several years and are used a large number of times

7

Define single use goods

Goods or services that are only used once

8

Define needs

They are essentials for survival: food, water, shelter, clothing and warmth

9

Define wants

They are not essential for survival but we like to have them

10

Define entrepreneur

Someone who is willing to take risks of setting up their own business

11

Define enterprise

The willingness to take risks show initiative and take on new ventures

12

Define public sector

Organisations that are owned by the state and run by the government

13

Define private sector

Organisations that are not owned by the state, including sole traders, partnerships and limited companies

14

Define third sector

The part of an economy comprising non-governmental and non-profit-making organisation, including charities, voluntary and community groups.

15

Define privatisation

The process of selling a public sector organisation to the private sector by changing it into a public limited company

16

Name 2 advantages of privatisation

-Governments can raise income from the sale leading to possible lower taxation
-Private sector involvement is likely to improve the service and efficiency.

17

Define primary sector

all activities that obtain natural resources (farming, mining etc.)

18

Name 2 disadvantages of privatisation

-If the organisation fails the public loses the service
-The prices could increase

19

Define secondary sector

All manufacturing and construction activities that create a finished good

20

Define tertiary sector

Selling finished goods and providing services

21

Define chain of production

The stages through which a product passes before being sold to a consumer

22

Name two advantages of owning business at each stage of
production

-The business is only reliant of themselves meaning higher quality.
-Economies of scale (the business doesn't charge itself prices since its not paying a supplier)

23

Name two disadvantages of owning business at each stage of production

-High amounts of capital is needed to setup
-Increased competition from firms at each stage of production.