Definitions 2

Question 1

Private sector

Answer 1

Comprises businesses owned and controlled by individuals or groups of individuals

Question 1

Public sector

Answer 1

Comprises organisationsaccountable to and controlled by central or local government

Question 2

Mixed economy

Answer 2

Economic resources are owned and controlled by both private and public sectors

Question 3

Free-Market economy

Answer 3

Economic resources are largely owned by the private sector, with very little state intervention

Question 4

Command economy

Answer 4

Economic resources are owned, planned and controlled by the state

Question 5

Privatisation

Answer 5

The sale of public sector organisations to the private sector

Question 6

Sole Trader

Answer 6

A business that is exclusively owned by one person who has full control and is entitled to all profits(after tax)

Question 7

Partnership

Answer 7

Business formed by two or more people to carry on a business together, with shared capital investment and, usually, shared responsibilities

Question 8

Primary sector

Answer 8

Extraction/production of raw materials from the Earth

Question 9

Secondary sector

Answer 9

Manufacturing and processing, where raw materials are made into products for sale

Question 10

Tertiary Sector

Answer 10

Any business that sells a service or goods

Question 11

Quarternary sector

Answer 11

Refers to services that focus on knowledge

Question 12

Profit

Answer 12

Total financial gain of an organisation. Total Revenue-Total Costs

Question 13

Revenue

Answer 13

Total income generated by sale of a good or service

Question 14

Four main concepts

Answer 14

Sustainability, ethics, change and creativity

Question 15

System

Answer 15

A group of related parts that work together for a purpose

Question 16

Physical resources

Answer 16

Raw materials

Question 17

Financial resources

Answer 17

Funds required to set up and maintain a business

Question 18

4 Processes of Business Management

Answer 18

Human resource Management
Finance and accounts
Marketing
Operations

Question 19

HR Management

Answer 19

Makes sure the business employs the correct number of skilled employees

Question 20

Operations

Answer 20

Plans how and in what quantity goods and services are to be produced

Question 21

Marketing

Answer 21

Responsible for ensuring the right product is sold to the right customer for the right price

Question 22

The economy

Answer 22

A system for producing and distributing goods and services among people

Question 23

Integrated business

Answer 23

A business that involves two or more sectors

Question 24

Business plan

Answer 24

A tool used to describe a businesses approach, reduces risk

Question 25

Charity

Answer 25

An organisation set up to raise money to help people in need or to support causes that require funding

Question 26

Triple bottom line

Answer 26

The three objectives of social enterprises: social, economic, environmental

Question 27

Public corporation

Answer 27

A business enterprise owned and controlled by the state

Question 28

Market share

Answer 28

Sales of a business as a proportion of total market size in a given period

Question 29

Shareholder value

Answer 29

The financial gains recieved by the owners of a company's shares

Question 30

Ethical code

Answer 30

A document detailing a company's rules and guidelines on staff behaviours that must be followed by all employees

Question 31

STEEPLE

Answer 31

Social, technological, economic, environmental, political, legal, ethical

Question 32

Acquisition

Answer 32

When a company purchases at least 50% of the shares of another company and becomes the controlling owner

Question 33

Synergy

Answer 33

The concept that following an acquisition or merger, the combined value and performance of two businesses will be greater than the sum of two seperate businesses

Question 34

Scale of operation

Answer 34

The maximum output that can be achieved using the available inputs

Question 35

Internal economies of scale

Answer 35

Reductions in average unit costs of production that result from an increase in the scale of operations of a business

Question 36

External economies of scale

Answer 36

Reductions in average unit costs of production of a business. Business enhancing factors that occur outside a company but within the same industry

Question 37

Internal diseconomies of scale

Answer 37

Factors that cause average unit costs of production to rise when the scale of business operation is increased

Question 38

External diseconomies of scale

Answer 38

Fcators causing average unit costs of production for a bsuiness to rise as an industry expands

Question 39

Multinantional Company

Answer 39

A company that operates in more than one company

Question 40

Foreign direct investment

Answer 40

Long-term investment by multinational companies in a foreign company

Question 41

Internal sources of finance

Answer 41

Money that is raised from the business's or owner's existing assets

Question 42

Personal funds

Answer 42

The money invested by the owner or owners of a business

Question 43

Retained profit

Answer 43

Money that a company has at the end of the trading year after paying all expenses, dividends and taxes. Also a businesses primary source of finance