section one

Question 1

need

Answer 1

good or service essential for living

Question 2

want

Answer 2

good or service which people would like to have but is not essential for living

Question 3

economic problem

Answer 3

unlimited wants exist but limited resources to produce goods and services

Question 4

factors of production

Answer 4

land labour capital enterprise
resources needed to produce goods and services

Question 5

scarcity

Answer 5

lack of sufficient products to fulfil populations needs and wants

Question 6

opportunity cost

Answer 6

next best alternative given up by choosing another item

Question 7

specialisation

Answer 7

people and the business do what they’re good at

Question 8

division of labour

Answer 8

production process split into different parts and each worker does one of these tasks

Question 9

business

Answer 9

a place where the factors of production are combined to make products

Question 10

added value formula

Answer 10

difference between the selling price and the cost of bought-in materials and other components
Selling price - cost

Question 11

primary sector

Answer 11

extraction natural resource from earth to produce raw materials

Question 12

secondary sector

Answer 12

manufactures goods and services using the raw materials produced in the primary sector

Question 13

tertiary sector

Answer 13

provides services to consumers and the other sectors of the industry

Question 14

tertiary sector

Answer 14

provides services to consumers and the other sectors of the industry

Question 14

tertiary sector

Answer 14

provides services to consumers and the other sectors of the industry

Question 15

de-industrialisation

Answer 15

decline in the importance of secondary sector

Question 16

mixed economy

Answer 16

both private sector and public sector

Question 17

private sector

Answer 17

businesses not owned by government

Question 18

public sector

Answer 18

business owned and controlled by government

Question 19

capital

Answer 19

money invested into a business by the owners

Question 20

entrepreneur

Answer 20

person who organises, operates and takes risk for a new business venture

Question 21

capital employed

Answer 21

total value of capital used in the business

Question 22

internal growth

Answer 22

business expands its existing operations

Question 23

external growth / integration

Answer 23

a business takes over or merges with another business

Question 24

takeover

Answer 24

business buys out the owners of another business

Question 25

merger

Answer 25

owners of two businesses agree to join their business together to make one business

Question 26

horizontal integration

Answer 26

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

Question 27

vertical integration

Answer 27

business merges with or takes over another business in the same industry but at a different stage of production

Question 28

conglomerate integration / diversification

Answer 28

business merges with or takes over another business in a completely different industry

Question 29

why do some businesses remain small?

Answer 29

type of industry the business is in market size owners objectives

Question 30

causes of business failure

Answer 30

lack of management skills changes in the business environment liquidity problems over expansion

Question 31

sole trader

Answer 31

business owned by one person - unlimited liability

Question 32

limited liability

Answer 32

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

Question 33

unlimited liability

Answer 33

owners of a business can be held responsible for the debts of the business they own liability not limited to investment

Question 34

partnership

Answer 34

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

Question 35

unincorporated business

Answer 35

does not have a separate legal identity eg. sole traders and partnerships

Question 36

incorporated business

Answer 36

companies that have separate legal status from their owners

Question 37

shareholders

Answer 37

owners of a limited company. they buy shares which represent ownership of the company

Question 38

private limited companies

Answer 38

businesses owned by shareholders but they can't sell shares to the public- only friends and family

Question 39

public limited companies

Answer 39

businesses owned by shareholders but they can sell their shares to the public and their shares are tradable on the stock exchange

Question 40

dividends

Answer 40

payments made to shareholders from the businesses profits. return to the shareholders for investing in the company

Question 41

franchise

Answer 41

business base uptown the brand names, promotional logos and trading methods of an existing successful business. the franchisee buys the licence to operate this business from the franchisor

Question 42

joint venture

Answer 42

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

Question 43

public corporation

Answer 43

business in the public sector that is owned and controlled by the state government

Question 44

business objectives

Answer 44

aims or targets that a business works towards

Question 45

profit

Answer 45

total income of a business - total costs pay a return to shareholders provide finance

Question 46

marketshare

Answer 46

percentage of total market sales held by one brand or business

Question 47

social enterprise

Answer 47

social objective as well as aim to make a profit to reinvest back into the business 3 aims- social, environmental, financial

Question 48

stakeholder

Answer 48

person or group with a direct interest in the performance and activities of a business