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Business > Business Activity > Flashcards

Business Activity Flashcards

1
Q

Need

A

A good or service that is essential for living.

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2
Q

Want

A

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

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3
Q

What is the economic problem?

A

There are unlimited wants, but limited resources to produce the good and services to satisfy those wants (this creates scarcity).

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4
Q

Scarcity

A

The lack of sufficient materials to fulfill the wants of the entire population.

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5
Q

Factors of production

A

The resources needed to produce goods and services.

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6
Q

What are the four factors of production?

A
  • Land
  • Labour
  • Capital
  • Enterprise
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7
Q

Land

A

All the natural resources provided by nature (for example: fields, forests, oil, gas, metals etc.).

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8
Q

Labour

A

The number of people available to produce products.

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9
Q

Capital

A

The finance, machinery and equipment needed for the manufacture of goods.

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10
Q

Enterprise

A

The skill and ability of the person who brings the factors of production together to produce a good or service (for example: a business owner).

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11
Q

Opportunity cost

A

The benefit that could have been gained from an alternate use of the same resource.

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12
Q

Specialization

A

People and businesses concentrate on what they are best at.

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13
Q

Division of labour

A

Production is divided into separate tasks and each worker does just one of those tasks.

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14
Q

Primary sector

A

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

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15
Q

Secondary sector

A

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

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16
Q

Tertiary sector

A

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

17
Q

De-industrialization

A

It occurs when there is a decline in the importance of the secondary, sector of industry in a country.

18
Q

Mixed economy

A

A mixed economy has both a private and a public sector.

19
Q

Private sector

A

Businesses not owned by the government.

20
Q

Public sector

A

Government owned and controlled businesses and organizations.

21
Q

Entrepreneur

A

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

22
Q

Business plan

A

A document containing them business objectives and important details about the operations, finance and owners of the new business.

23
Q

Value

A

How much something is worth.

24
Q

Business size

A

Measured by:

  • Number of employees
  • Value of output
  • Value of sales
  • Value of capital employed
25
Q

Capital employed

A

The total value of capital used in the business.

26
Q

Internal growth

A

Internal growth occurs when a business expands its existing operations

27
Q

External growth

A

When a business takes over or merges with another business.

28
Q

Integration

A

Integration is when one firm is integrated into another one.

29
Q

Merger

A

When the owners of the two businesses agree to join their firms together to make one business.

30
Q

Takeover

A

A takeover is when one business buys out the owners of another business.

31
Q

Horizontal integration

A

When one firm merges with or takes over another one in the same industry at the same stage of production.

32
Q

Vertical integration

A

When one firm merges with or takes over another one in the same industry but at a different stage of production.

33
Q

Conglomerate integration

A

When one firm merges with or takes over a firm in a completely different industry.

34
Q

Sole trader

A

A business owned by one person.

35
Q

Liability

A

Being responsible for something (especially by law).

36
Q

Limited liability

A

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

37
Q

Unlimited liability

A

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

38
Q

Partnership

A

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

39
Q

Shareholders

A

The owners of a limited company. They buy shares which represent part ownership of a company.

Business (6 decks)

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