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Business Studies External Influences > Key Concepts > Flashcards

Key Concepts Flashcards

(67 cards)

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1
Q

Substitute

A

A replacement for a product you use. It will be very similar. Alternative product which serves the same purpose

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2
Q

Competition

A

Refers to rivalry among sellers

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3
Q

Market

A

Any situation where buyers and sellers are in contact to establish price

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4
Q

Competitive market

A

A market in which there are a large number of sellers. Competition is mainly based on price

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5
Q

Monopoly

A

A market dominated by one seller (25%)

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6
Q

Demand

A

The amount of a good/ service that customers are willing and able to buy at any given price

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7
Q

Supply

A

The amount of a good/ service that sellers are willing and able to sell at any given price

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8
Q

Equilibrium price

A

The situation in a market where demand is equal to supply

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9
Q

Inelastic

A

Insensitive to change in price (not many substitutes)

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10
Q

Elasticity of demand

A

Measures how sensitive quantity demanded is to a change in price

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11
Q

Inelastic demand

A

The quantity demanded is insensitive to a change in price

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12
Q

Elastic demand

A

The quantity demanded is sensitive to a change in price

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13
Q

Complement

A

A product that should be sold alongside another- they work together (eg a DVD player and a dvd)

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14
Q

Economies of scale

A

They arise when unit costs fall as output rises

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15
Q

Oligopoly

A

Exists where a market is dominated by a few firms (eg mobile phone network market)

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16
Q

Collusion

A

When two or more parties act together to influence production and/ or price levels, thus preventing fair competition. It is illegal but difficult to prove.

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17
Q

Monopolistic competition

A

A market structure with many competing firms each of which supplies slightly differentiated products

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18
Q

Market size

A

Expressed as the collective value of the goods/ services that buyers purchase

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19
Q

Market growth

A

The percentage change in the size of the market, measured over a specific period

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20
Q

Market share

A

The percentage of total sales (by value) that a business has in a specified market

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21
Q

Barriers to entry

A

The factors that could prevent a firm from entering and competing in a market

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22
Q

Barriers to exit

A

The factors that could prevent a firm from leaving a market, even if it wanted to

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23
Q

Merger

A

This is where two companies join together to form a new larger business

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24
Q

Acquisition/ takeover

A

This is where control of another company is achieved by buying a majority of shares

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25
Market dominance
A measure of market share compared to competitors
26
Market power
The ability of a firm to influence or control the terms and conditions on which goods are bought and sold
27
Organic growth
Growth from within the business
28
Globalisation
The world coming together to trade in each others markets
29
Multinationals
A business that has activities and operations in more than one country
30
Strategy
A plan of action
31
Global strategy
Companies that are keen to operate on a global scale must consider how to build a competitive global advantage
32
Brand
A distinctive product offering created by the use of a logo, symbol, name, design etc. The key in designing and building a brand is to be different from competitors
33
Global brand
Brands that are recognised throughout much of the world
34
European single market
A single market which seeks to guarantee the movement of goods, capital, services and labour within the EU
35
European Union
The economic and political union of most European states aimed at reducing trade barriers and harmonising economic policy
36
Free trade
Involves agreement between countries between countries to trade with each other without erecting barriers to trade
37
Quota
Limit on the total quantity of a product can be imported in to a country in a given period
38
Tariffs
A duty paid on imports
39
Demographics
The characteristics of human population groups
40
Ethics
Concerned with the judgement about whether something is morally right or wrong
41
Sustainability
The endurance of resources. Refers to preventing negative impacts from economic systems and production on the earth and its environment
42
GDP
The total value of output produced i an economy in a year
43
Economic growth
The annual percentage change in GDP
44
Standard of living
The amount of goods and services a person can buy with their income in a year
45
Inflation
Persistent general tendency of prices in the economy to rise
46
Trading bloc
A group of countries (eg the EU) within a particular geographical region that protect themselves from imports from non-memebers
47
Emerging markets
A country that is achieving rapid growth as well as industrialisation. (Development of the secondary and tertiary sectors)
48
Digital revolution
Encompasses the shift from analog and mechanical technology to digital technology
49
Information Age
A time when large amounts of information is widely available
50
Consumer price index (CPI)
A measure that examines the weighted average of prices of a basket of consumer goods/ services
51
Exchange rate
The value of money of one currency in terms of another
52
Import
When money leaves the uk
53
Export
When money enters the uk
54
Interest rate
The cost of borrowing and reward for saving expressed as a percentage
55
Unemployment
A situation in which people who are able and willing to find work are not able to find employment
56
Balance of payment/ trade
Difference between the value of exports and imports
57
Indirect tax
Taxes on expenditure. They are paid to the tax authorities, not by the consumer, but indirectly by the suppliers of the good or service
58
Direct tax
Taxes on income and profits, paid directly by the bearer to the tax authorities
59
Income tax
A tax taken out of a persons income
60
National insurance
This is taken as a contribution towards the state pension and treatments under the NHS
61
Corporation tax
A tax on profits made by companies
62
Subsidy
Payments by the government to suppliers that reduce their costs. The effect of a subsidy is to increase supply and the market equilibrium price
63
Fiscal policy
Economic policy conducted by the government through taxation and public spending
64
Monetary policy
Manipulation of the level of demand in the economy using the rate of interest
65
Multiplier effect
The effect of changes in the economic activity in one sector on another sector
66
Supply side policies
Aim to improve the economies overall productive capacity
67
International trade
Refers to selling across borders (eg the exchanging of good/ services between countries)

Business Studies External Influences (8 decks)

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