Business Definitions C1 and other topics

Question 1

define goods

Answer 1

items produced by the conversion of raw materials into finished products by the secondary sector

They are tangible/physical products, e.g. a car

Question 2

define services

Answer 2

intangible, a task performed in return for payment

this includes personal/direct services, e.g. hairdresser/haircut, and commercial services, e.g. banking and insurance services

Question 3

define aims

Answer 3

The long-term intentions that provide a focus for setting objectives
They are usually expressed qualitatively, sometimes in the form of a mission statement

Question 4

define objectives

Answer 4

The medium to long-term targets that can give a sense of direction to a manager, department or whole organisation, e.g. boost market share from 8% to 10% within the next 3 years

Question 5

what are the aims of the public sector?

Answer 5

• provide a universal service to all UK
  households wherever they are located
• provide a service that the private sector may
  not be willing to provide as it may not be
  profitable to do so
• to make a trading surplus if possible
• provision of merit goods to raise society’s
  standard of living
• to ensure effective provision of public goods

Question 6

what are the aims of the private sector?

Answer 6

• survival
• profit maximisation
• maximizing growth
• gaining market share
• maximising sales revenue
• maximising shareholder value
• diversifying into new products/new markets
• social aims
• ethical aims
• improving reputation
• improved quality
• environmental
• increased efficiea2ncy
• competitiveness

Question 7

define public goods

Answer 7

goods that would not be provided in a free market system because businesses would not be able to charge for them

Question 8

define non-rivalry

Answer 8

the consumption of the good by one individual does not reduce the amount available for others, e.g. social
services

Question 9

define non-excludability

Answer 9

it is impossible to exclude others from benefiting from their use, i.e. people who use the street will benefit
from the street lighting provided

Question 10

define merit goods

Answer 10

Merit goods are goods that could be provided by the free market but policy makers recognise that they would be under-consumed