Business Studies Flashcards
(32 cards)
Need
A good or service essential for living.
Want
A good or service which people would like to have, but which is not essential for living. People’s wants are unlimited.
Economic Problem
There exists unlimited wants but limited resources to produce those goods and services to satisfy those wants. This creates scarcity
Factors of Production
Resources needed to produce goods and services (4 and limited)
Scarcity
The lack of sufficient products to fulfil the total wants of the population.
Specialisation
Specialisation occurs when people and businesses concentrate on what they are best at.
Division of Labour
Division of Labour is a type of specialization where the production process is split up into different tasks and each worker performs one of these tasks.
Factors of Production
Land,Labour,Capital and Enterprise
Why specialisation is common
Widely Available, Keeps costs low (bs), higher living standards for people
What do businesses do?
Businesses combine factors of production to make products which satisfy people’s wants profitably
Added value
The difference between selling price of the product and the cost of bought of bought in materials, which is used to pay other expenses and earn profit.
How can a business increase added value?
They could increase selling price
They could reduce costs of materials
3 stages of Business/economic activity
Primary, Secondary, Tertiary
Primary Sector
Extracts and uses natural resources to produce raw materials used by other businesses
Secondary Sector
Secondary Sector uses raw materials and other factors of production to produce goods consumers need or want.
Tertiary Sector
Sector of Industry that provides services to consumers and other sectors of Industry
De-industrialisation
Occurs when there is a decline in the importance of the secondary,manufacturing sector of industry in a country
Mixed Economy
An economy with both a private sector and a public sector
Capital
The money invested into the business by the owner
Privatisation
When the government sells some public sector businesses to private sector businesses.
Entrepreneur
A person who organises, operates and takes the risk for a new business venture.
Qualities of Entreprenuer
Innovative Commited and Sincere Good Leader Multi-skilled Risk taking ability
Business Plan
A document containing business objectives and important details about the operations, finance and owners of the new business.
Ways of measuring Business Size(4)
Number of Employees
Value of Output
Value of Sales
Value of Capital Employed
