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Business Studies > Definitions - Unit 1 > Flashcards

Definitions - Unit 1 Flashcards

1
Q

need

A

A need is a good or service essential for living

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2
Q

want

A

A want is a good or service which people would like to have but which is not essential for living. People’s wants are unlimited.

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3
Q

economic problem

A

There exist unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity

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4
Q

Factors of production

A

Those resources needed to produce goods and services. There are four factors of production, and they are in limited supply.

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5
Q

Scarcity

A

Scarcity is the lack of sufficient products to fulfill the
total wants of the population

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6
Q

Opportunity cost

A

Opportunity cost is the next best alternative given up
by choosing another item

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7
Q

Specialization

A

Specialization occurs when people and businesses
concentrate on what they are best at

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8
Q

Division of labour

A

Division of labour is when the production process is
split up into different tasks and each worker performs
one of those tasks. It is a form of specialization

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9
Q

Added value

A

Added value is the difference between the selling
price and the cost of bought-in materials and
components

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10
Q

The primary sector

A

The primary sector of industry extracts and uses the
natural resources of Earth to produce raw materials
used by other businesses

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11
Q

The secondary sector

A

The secondary sector of industry manufactures goods
using the raw materials provided by the primary
sector

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12
Q

The tertiary sector

A

The tertiary sector of industry provides services to
consumers and other sectors of industry

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13
Q

De-industrilization

A

De -industrialisation occurs when there is a decline in
the importance of the secondary, manufacturing
sector of industry in a country

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14
Q

Mixed Economy

A

Mixed economy has both a private sector and a public
(state) sector

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15
Q

Capital

A

Capital is the money invested into the business by the
owners

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16
Q

Entrepreneur

A

An entrepreneur is a person who organises, operates
and takes the risk for a new business venture

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17
Q

Capital employed

A

Capital employed is the total value of capital used in
the business

18
Q

Internal Growth

A

Internal Growth occurs when a business expands its
existing operations

19
Q

External Growth

A

External Growth is when a business takes over or
merges with another business. It is often called
integration as one business is integrated into another
one

20
Q

Takeover

A

A takeover or acquisition is when one business buys
out the owners of another business, which then becomes part of the ‘predator’ business [the business
which has taken it over]

21
Q

Merger

A

A merger is when the owners of two businesses agree
to join their businesses together to make one
business

22
Q

Horizontal integration

A

Horizontal integration is when one business merges
with or takes over another one in the same industry
at the same stage of production

23
Q

Vertical integration

A

. Vertical integration is when one business merges with
or takes over another one in the same industry but at
a different stage of production. Vertical integration
can be forward or backward.

24
Q

Conglomerate integration

A

Conglomerate integration is when one business
merges with or takes over a business in a completely
different industry. This is also known as
diversification.

25
Q

Sole trader

A

Sole trader is a business owned by one person

26
Q

Limited liability

A

Limited liability means that the liability of
shareholders in a company is limited to only the
amount they invested

27
Q

Unlimited liability

A

Unlimited liability means that the owners of a
business can be held responsible for the debts of the
business they own. Their liability is not limited to the
investment they made in the business

28
Q

Partnership

A

Partnership is a form of business in which two or
more people agree to jointly own a business

29
Q

Unincorporated businesses

A

Unincorporated business is one that does not have a
separate legal identity. Sole traders and partnerships
are unincorporated businesses

30
Q

Incorporated businesses

A

incorporated businesses are companies that have
separate legal status from their owners

31
Q

Shareholders

A

Shareholders are the owners of a limited company.
They buy shares which represent part-ownership of
the company.

32
Q

Private limited companies

A

Private limited companies are businesses owned by
shareholders but they cannot sell shares to the public.

33
Q

Public limited companies

A

Public limited companies are businesses owned by
shareholders but they can sell shares to the public
and their shares are tradable on the Stock Exchange

34
Q

Dividends

A

Dividends are payments made to shareholders from
the profits [after tax] of a company. They are the
returns to shareholders for investing in the company.

35
Q

Franchise

A

A franchise is a business based upon the use of the
brand names, promotional logos and trading methods
of an existing successful business. The franchisee
buys the license to operate this business from the
franchisor

36
Q

Joint venture

A

A joint venture is where two or more businesses start
a new project together, sharing capital, risks and
profits

37
Q

Public corporation

A

A public corporation is a business in the public sector
that is owned and controlled by the state
[government]

38
Q

Business objectives

A

A public corporation is a business in the public sector
that is owned and controlled by the state
[government]

39
Q

Profit

A

Total revenue-Total costs`

40
Q

Market share

A

Market share is the percentage of total market sales
held by one brand or business

41
Q

Social enterprise

A

A social enterprise has social objectives as well as an
aim to make a profit to reinvest back into the business

42
Q

Stakeholder

A

A stakeholder is any person or group with direct
interest in the performance and activities of a
business

Business Studies (6 decks)

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