Key Terms

Question 1

What is a Business?

Answer 1

An organisation that provides goods and services that meet the needs and wants of customers.

Question 2

What are Producer goods?

Answer 2

Goods sold to other businesses that use them to make other products.

Question 3

What are Consumer goods?

Answer 3

Goods that are ultimately purchased and used by the final consumer.

Question 4

What is a non-durable good?

Answer 4

A physical product that can only be used once (e.g. a match).

Question 5

What is a durable good?

Answer 5

A physical product that is intended to be used more than once and lasts a long time (e.g. a mobile phone).

Question 6

What is a Service?

Answer 6

A non-physical product.

Question 7

What are Personal services?

Answer 7

Services targeted at consumers rather than businesses.

Question 8

What are Commercial services?

Answer 8

Services targeted at businesses rather than consumers.

Question 9

Who is a Customer?

Answer 9

A person or organisation that buys products from businesses.

Question 10

What is a Final consumer?

Answer 10

The customer that ultimately consumes a good or service.

Question 11

What is a Supplier?

Answer 11

A business that sells goods and services to other businesses.

Question 12

What is an Economy?

Answer 12

The combination of individuals, businesses and government organisations that make decisions about production and consumption in a country or region.

Question 13

What is a Sector?

Answer 13

Part of a nation’s economy containing organisations with similar characteristics.

Question 14

What is the Public sector?

Answer 14

The part of an economy containing organisations that are owned by national or local government.

Question 15

What is the Private sector?

Answer 15

The part of an economy containing organisations that are owned by individuals or businesses.

Question 16

What is a Resource?

Answer 16

Something that is useful for completing a task.

Question 17

What is Raw material?

Answer 17

A natural resource used in production.

Question 18

What is Equipment?

Answer 18

Tools and devices used to complete a task.

Question 19

What are Machines?

Answer 19

Apparatus that uses mechanical power to complete a task.

Question 20

What is Labour / workers?

Answer 20

People that are employed to complete tasks.

Question 21

What is a Site?

Answer 21

The particular piece of land within a geographical area where the business operates.

Question 22

What is an Enterprise?

Answer 22

Another word for a business.

Question 23

Who is an Entrepreneur?

Answer 23

Someone who is willing to take the risks involved in setting up a business.

Question 24

What are the Roles of an entrepreneur?

Answer 24

Identifying opportunities, organising resources, using initiative.

Question 25

What are the Characteristics of an entrepreneur?

Answer 25

Being innovative, being determined, being hardworking, being willing to take risks.

Question 26

What is a business plan?

Answer 26

A report outlining what a business does and how it intends to develop in the future.

Question 27

What are the 6 sections of a business plan ?

Answer 27

Business description Marketing Finance Production & operations Human Resources Aims / objectives

Question 28

What is an aim?

Answer 28

A top level outline of a business’ purpose

Question 29

What is an objective?

Answer 29

A specific target that is set in order for a business to achieve its aim. Common objectives relate to profit maximisation market share sales, customer satisfaction and ethical factors.

Question 30

What is a strategy?

Answer 30

A long-term plan for achieving objectives

Question 31

What is profit maximisation?

Answer 31

Making as much profit as possible

Question 32

What is market share?

Answer 32

A percentage of a market’s total sales that is generated by a particular business

Question 33

What is customer satisfaction?

Answer 33

A measure of how much a customer likes the service or good

Question 34

What are SMART objectives?

Answer 34

Specific Measurable Agreed Realistic Timebound

Question 35

What is a stakeholder?

Answer 35

An individual or organisation that affects or is affected by a business Examples include: customers, suppliers, competitors, communities, the government, employees, owners and managers

Question 36

What are the contradictory effects on stakeholders?

Answer 36

Where an action by a business may be good for one stakeholder but maybe bad for another.

Question 37

What are sources of finance?

Answer 37

The different options a business has to access large amounts of money.

Question 38

What are internal sources of finance?

Answer 38

Money sourced within the business.