Buisness Activity (Keywords)

Question 1

Define Need

Answer 1

A need is a good or service essential for living

Question 2

Define Want

Answer 2

A want is a good or service which people would like to have, but which is not essential for living. People’s wants are unlimited

Question 3

Define Economic Problem

Answer 3

Economic Problem- There exist unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity

Question 4

Define Factor of Production

Answer 4

Factors of production are those resources needed to produce goods and services. There are four factors of production and they are in limited supply

Question 5

Define Scarcity

Answer 5

Scarcity is the lack of sufficient products to fulfill the total wants of the population

Question 6

Define Opportunity Cost

Answer 6

Opportunity cost is the next best alternative given up by choosing another item

Question 7

Define Specialisation

Answer 7

Specialization occurs when people and businesses concentrate on what they are best at

Question 8

Define Division of Labour

Answer 8

Division of labour is when the production process is split up into different tasks and each worker performs one of those tasks. It is a form of specialization

Question 9

Define Added Value

Answer 9

Added value is the difference between the selling price and the cost of bought-in materials and components

Question 10

Define Primary Sector

Answer 10

The primary sector of industry extracts and uses the natural resources of Earth to produce raw materials used by other businesses

Question 11

Define Secondary Sector

Answer 11

The secondary sector of industry manufactures goods using the raw materials provided by the primary sector

Question 12

Define Teritary Sector

Answer 12

The tertiary sector of industry provides services to consumers and other sectors of industry

Question 13

Define De-industrialisation

Answer 13

De -industrialisation occurs when there is a decline in the importance of the secondary, manufacturing sector of industry in a country

Question 14

Define Capital

Answer 14

Capital is the money invested into the business by the owners

Question 15

Define Entrepreneur

Answer 15

An entrepreneur is a person who organises, operates and takes the risk for a new business venture

Question 16

Define Capital Employed

Answer 16

Capital employed is the total value of capital used in the business

Question 17

Define Internal Growth

Answer 17

Internal Growth occurs when a business expands its existing operations

Question 18

Define External Growth

Answer 18

External Growth is when a business takes over or merges with another business. It is often called integration as one business is integrated into another one

Question 20

Define Merger

Answer 20

A merger is when the owners of two businesses agree to join their businesses together to make one business

Question 21

Define Horizontal Integration

Answer 21

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

Question 22

Define Vertical Integration

Answer 22

Vertical integration is when one business merges with or takes over another one in the same industry but at a different stage of production. Vertical integration can be forward or backward.

Question 23

Define Conglomerate integration

Answer 23

Conglomerate integration is when one business merges with or takes over a business in a completely different industry. This is also known as diversification.

Question 24

Define Limited Liability

Answer 24

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

Question 25

Define unlimited liability

Answer 25

Unlimited liability means that the owners of a business can be held responsible for the debts of the business they own. Their liability is not limited to the investment they made in the business

Question 26

Define Partnership

Answer 26

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

Question 27

Define Unincorporated Buisness

Answer 27

Unincorporated business is one that does not have a separate legal identity. Sole traders and partnerships are unincorporated businesses

Question 28

Define incorporated Buisness

Answer 28

incorporated businesses are companies that have separate legal status from their owners

Question 29

Define Shareholders

Answer 29

Shareholders are the owners of a limited company. They buy shares which represent part-ownership of the company.

Question 30

Define Private limited Company

Answer 30

Private limited companies are businesses owned by shareholders but they cannot sell shares to the public.

Question 31

Define Public limited Company

Answer 31

Public limited companies are businesses owned by shareholders but they can sell shares to the public and their shares are tradable on the Stock Exchange

Question 32

Define Dividens

Answer 32

Dividends are payments made to shareholders from the profits [after tax] of a company. They are the returns to shareholders for investing in the company.

Question 33

Define Franchise

Answer 33

A franchise is a business based upon the use of the brand names, promotional logos and trading methods of an existing successful business. The franchisee buys the license to operate this business from the franchisor

Question 34

Define Joint Venture

Answer 34

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

Question 35

Define Public Corporation

Answer 35

A public corporation is a business in the public sector that is owned and controlled by the state [government]

Question 36

Define Buisness Objectives

Answer 36

Business objectives are the aims or targets that a business works towards

Question 37

Define Profit

Answer 37

Profit is total income of a business [revenue] minus total costs

Question 37

Define Market Share

Answer 37

Market share is the percentage of total market sales held by one brand or business

Question 38

Define Social Entreprise

Answer 38

A social enterprise has social objectives as well as an aim to make a profit to reinvest back into the business

Question 38

Define Stakeholder

Answer 38

A stakeholder is any person or group with direct interest in the performance and activities of a business