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IGCSE > Business Studies > Flashcards

Business Studies Flashcards

1
Q

Need

A

A good or service essential for living.

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2
Q

Want

A

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

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3
Q

Economic Problem

A

There exists unlimited wants but limited resources to produce those goods and services to satisfy those wants. This creates scarcity

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4
Q

Factors of Production

A

Resources needed to produce goods and services (4 and limited)

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5
Q

Scarcity

A

The lack of sufficient products to fulfil the total wants of the population.

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6
Q

Specialisation

A

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

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7
Q

Division of Labour

A

Division of Labour is a type of specialization where the production process is split up into different tasks and each worker performs one of these tasks.

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8
Q

Factors of Production

A

Land,Labour,Capital and Enterprise

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9
Q

Why specialisation is common

A

Widely Available, Keeps costs low (bs), higher living standards for people

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10
Q

What do businesses do?

A

Businesses combine factors of production to make products which satisfy people’s wants profitably

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11
Q

Added value

A

The difference between selling price of the product and the cost of bought of bought in materials, which is used to pay other expenses and earn profit.

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12
Q

How can a business increase added value?

A

They could increase selling price

They could reduce costs of materials

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13
Q

3 stages of Business/economic activity

A

Primary, Secondary, Tertiary

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14
Q

Primary Sector

A

Extracts and uses natural resources to produce raw materials used by other businesses

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15
Q

Secondary Sector

A

Secondary Sector uses raw materials and other factors of production to produce goods consumers need or want.

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16
Q

Tertiary Sector

A

Sector of Industry that provides services to consumers and other sectors of Industry

17
Q

De-industrialisation

A

Occurs when there is a decline in the importance of the secondary,manufacturing sector of industry in a country

18
Q

Mixed Economy

A

An economy with both a private sector and a public sector

19
Q

Capital

A

The money invested into the business by the owner

20
Q

Privatisation

A

When the government sells some public sector businesses to private sector businesses.

21
Q

Entrepreneur

A

A person who organises, operates and takes the risk for a new business venture.

22
Q

Qualities of Entreprenuer

A 
Innovative
Commited and Sincere 
Good Leader
Multi-skilled
Risk taking ability
23
Q

Business Plan

A

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

24
Q

Ways of measuring Business Size(4)

A

Number of Employees
Value of Output
Value of Sales
Value of Capital Employed

25
Q

Benefits of Business Expansion(6)

A 
Higher Profits
More status, power and salary 
Economies of scale
Higher market share
Diversification to spread risks
26
Q

Internal Growth

A

Growth that occurs when a business expands its existing operations.

27
Q

External Growth

A

When a business takes over or merges with another business. Often called Integration

28
Q

Takeover or Acquisition

A

Is when one business buys out the owners of another business, which then become part of the ‘predator’ business. (The business which has taken the other one over)

29
Q

Merger

A

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

30
Q

Horizontal Integration

A

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

31
Q

Vertical Integration

A

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

32
Q

Conglomerate Integration or Diversification

A

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

IGCSE (5 decks)

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