Business behaviour and Markets - Unit 1 Flashcards
What is the private sector?
- The sector controlled by private individuals/shareholders
- Their main goal is to boost profit, market share and sales volume
What is a social enterprise?
A business that aims to make a profit but also shows concern for society - e.g. by showing concern for the environment and supporting fair trade
What is the Public sector?
- The sector controlled by the government
- Its aim is to provide cheap, reliable services to the population.
What is privatisation?
The transfer of ownership from the public to the private sector
Reasons for privatisation:
- To gain a one-off payment
- To improve efficiency and responsiveness to customers (private healthcare)
- To increase access of firms to more sources of finance
- To remove political interference
What is nationalisation?
The transfer of ownership from the private to the public sector
Reasons for nationalisation:
- To retain control of vital industries - e.g. defence
- To avoid business failure - because knock-on effects are seen as too high e.g. Lloyds TSB
- To allow more important objectives rather than profit to be pursued e.g. equal access - post office
What are the types of costs that come with production?
Variable and fixed costs
What are fixed costs?
Costs that do not vary with output
What are variable costs?
Costs that do vary with output
Total costs =?
Fixed costs + Variable costs
Average costs =?
total costs/output
Revenue =?
Price x Quantity
Profit =?
Total revenue - Total costs
What is productivity?
Output per worker per period of time
