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EDEXCEL IGCSE Economics 2024 > 1.2 Business Economics > Flashcards

1.2 Business Economics Flashcards

1
Q

Production

A

Process that involves converting resources into goods or services (to satisfy needs and wants)

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2
Q

Factors of production

A

Resources used to produce goods and services (land, labour capital and enterprise)

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3
Q

Land

A

All natural resources in an economy

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4
Q

Labour

A

People used on production

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5
Q

Human capital

A

Value of workforce or an individual worker

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6
Q

Capital

A

Man-made resources available in an economy, help produce goods

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7
Q

Working / circulating capital

A

Resources used up in production - raw materials & components.

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8
Q

Fixed capital

A

Stocks of “man-made” resources help in production - machines & tools

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9
Q

Enterprise (entrepreneurs)

A

individuals who organise the other factors of production and risk their own money in the business venture

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10
Q

Capital intensive

A

production relies heavily on machinery relative to labour.

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11
Q

Labour intensive

A

production relies heavily on labour relative to machinery.

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12
Q

Labour intensive

A

production relies heavily on labour relative to machinery.

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13
Q

Primary sector

A

production involving the extraction of raw materials from earth.

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14
Q

Secondary sector

A

involving the processing of raw materials = finished/semi-finished goods

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15
Q

Tertiary sector

A

production of services in the economy.

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16
Q

De-industrialization

A

decline in manufacturing (secondary -> tertiary)

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17
Q

Industrialization

A

process of shifting resources from primary to secondary sector.

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18
Q

Productivity

A

rate at which goods are produced, and the amount produced in relation to the work, time, and money needed to produce them.

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19
Q

Training

A

to improve the quality of human capital is to invest in training.

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20
Q

Piece rates

A

amount of money paid for each item a worker produces (rather than time taken)

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21
Q

Job rotation

A

practice of regularly changing the person who does a particular job. (Job satisfaction)

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22
Q

Division of labour

A

breaking down of the production process into small parts with each worker allocated to a specific task.

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23
Q

Specialization

A

production of a limited range of goods by individuals, firms, regions or countries.

24
Q

Costs

A

expenses that must be met, setting & running a business

25
Q

Fixed costs

A

(overheads) costs that do not vary with the level of output = rent, advertising, insurance premiums, interest payments, research and development costs.

26
Q

Variable cost

A

costs that change when output levels change.

27
Q

Calculate “Total Variable Cost” (TVC)

A

Variable cost per unit (VC) x number of units produced (Q)

28
Q

Total Cost (TC)

A

Total fixed costs and total variable costs added together. TFC + TVC = TC

29
Q

Average cost of production

A

cost of producing a single unit of output. (Total cost / Quantity produced)

30
Q

Total Revenue (TR)

A

amount of money a firm receives from selling its output. (Total revenue = Price x Quantity)

31
Q

Profit

A

difference between total revenue and total costs (profit = total revenue - total cost)

32
Q

Economies of scale

A

falling average costs due to expansion

33
Q

Diseconomies of scale

A

rising average costs when a firm becomes too big - aspects of production become inefficient

34
Q

Internal economies of scale

A

cost benefits that an individual firm can enjoy when it expands.

35
Q

Name 6 internal economies of scale

A

1 Purchasing economies
2 Marketing economies
3 Technical economies
4 Financial economies
5 Managerial economies
6 Risk-bearing economies

36
Q

External economies of scale

A

cost benefit all firms in industry can enjoy, when the industry expands.

37
Q

Competition

A

rivalry exists between firms when trying to sell goods to the same group of customers.

38
Q

Monopoly

A

a situation where there is one dominant seller in a market (25% more)

39
Q

Pure monopoly

A

one producer supplies the whole market, 100% market share.

40
Q

Natural monopoly

A

one firm in an industry can serve an entire market at a lower cost than would be possible if the industry were composed of many smaller firms.

41
Q

Patent

A

licence that grants permission to operate as a sole producer of a newly designed product

42
Q

Oligopoly

A

market dominated by a few large firms.

43
Q

Collusion

A

informal agreements between firms to restrict competition

44
Q

Price wars

A

one firm in the industry reduces price causing others to do the same

45
Q

Niche market

A

market for a product or service, perhaps expensive / unusual, does not have many buys - but make good profits

46
Q

Cartel

A

group of firms or countries join together and agree on pricing or output levels in market

47
Q

Wage rate

A

the amount of money paid to workers for their services over a period of time (price of labour)

48
Q

Derived demand

A

demand that arises because there is demand for another good.

49
Q

Factors affecting the demand of labour (shift)

A

DOAP
Demand for products
Other employment costs
Availability of substitutes
Productivity of workers

50
Q

Factors affecting supply of labour (shift)

A

SPLARFMS
Skills & Qualifications
Population
Labour mobility
Age distribution of population
Retirement age
Female participation
Migration
School leaving age

51
Q

Trade unions

A

organisation representing people working in an industry, protects their rights.

52
Q

Government intervention

A

government involved in a situation, help deal with a problem

53
Q

Minimum wage

A

minimum amount per hour which most workers are legally entitled to be paid.

54
Q

Closed shop

A

Company or factory where all the workers must belong to a particular trade union

55
Q

Secondary picketing

A

Workers in one workplace or company strike in a group at a particular location in order to support the striking workers in a different workplace or company

56
Q

Labour mobility

A

Ease with which workers move geographically and occupationally between different jobs

EDEXCEL IGCSE Economics 2024 (4 decks)

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