1. Business In The Real World Flashcards
What is a Good?
A physical product, such as a car
What is a service?
An intangible product that you cannot touch
What is a customer?
Someone who buys a product from a business
What is a consumer?
Someone who uses goods and services produced by businesses
What is an Entrepreneur?
Someone who is willing to take the risks involved in starting a new business
What is Entrepreneurship?
Refers to the ability to be an entrepreneur - to take risks to develop a business idea
What is a social enterprise?
A business that is set up to help society rather than to make a profit
What is resources?
The inputs that businesses use to provide their goods or services
What is an enterprise?
another word for a business. It also refers to the skills of the people involved in the business to identify business opportunities and bring together resources to meet these opportunities.
What is interest?
The money paid by banks as a reward to attract people to save with them
What is interest rates?
the cost of borrowing money or the reward for saving money, expressed as a percentage.
What is inflation?
the rate at which prices are increasing.
What is Gross Domestic Product (GDP)?
measures all the income earned in a country’s economy in a year.
What is a sole trader?
someone who sets up in business on his or her own.
What is profit?
measures the difference between the values of a business’s revenue (sales) and its total costs.
What is unlimited liability?
the personal possessions of the owners of a business are at risk if there are any problems. There is no limit to the amount of money the owners may have to pay out.
What is partnership?
when two or more people join together in a business enterprise to pursue profit.
What is Deed of partnership?
an agreement between partners that sets out the rules of the partnership, such as how profits will be divided and how the partnership will be valued if someone wants to leave.
What is a Stakeholder?
individuals and organisations that are affected by, and affect, the activities of a business.
What is a company?
a business that has its own legal identity. It can own items, owe money, sue and be sued.
What is a shareholder?
a person or an organisation that owns part of a company. Each shareholder owns a ‘share’ of the business.
What is Stock exchange?
A market for buying and selling shares of public limited companies. Large numbers of shares are being bought and sold all the time.
What is not-for-profit organisation
set up to achieve objectives other than profit; for example, a charity.
What is an Aim?
a general goal of a business.
What is an objective?
a specific target that is set for a business to achieve.
What is a private sector organisations?
Owned by individuals
What is a public sector organisation?
Owned by the government
What is Dividens?
the financial rewards paid out to shareholders each year.
What is Negotiation?
when two sides discuss what they want and try to reach a solution.
What is a Tariff?
a tax on foreign goods imported into a country.
What is imports?
Goods and services purchased from overseas by consumers of businesses
What is a business plan?
A document setting out what a business does and what it hopes to achieve in the future.
What is Business planning?
the process of producing a business plan.
What is uncertainty?
where there is a lack of information about a situation. This means the outcome or consequences are very difficult to predict.
What is a risk?
the possibility of something going wrong.
What is revenue?
the income that a firm receives from selling its goods or services. It is also referred to as ‘turnover’. It is measured by the number of units sold multiplied by the price.
What is total costs?
fixed costs plus variable costs.
What is fixed costs?
those costs that do not change when a business changes its output.
What is variable costs?
the costs that vary directly with the business’s level of output.
What is internal growth?
(also known as organic growth) occurs when a business gets bigger by selling more of its products.
What is External growth?
(also known as integration) occurs when a business gets bigger by joining or buying other businesses.
What is market capitalisation?
a company measures the value of all its shares:
market capitalisation = market price of a share × the number of shares
What is a franchise?
when a franchisor sells the rights to its products to a franchisee; this is usually in return for a fee and percentage of turnover.
What is a franchisee?
buys a franchise usually in return for a fee and percentage of turnover.
What is a franchisor?
sells a franchise usually in return for a fee and percentage of turnover.
What is E-commerce?
the act of buying or selling a product using an electronic system such as the internet.
What is outsourcing?
when a business uses another business to produce for it.
What is a merger?
when two or more businesses join together to form a new business.
What is a takeover?
when one business buys control of another one.
What is economies of scale?
when a business’s unit costs of production fall as its output rises and the business expands.
What is diseconomies of scale?
when the cost per unit increases as a business expands.
