business unit 1 vocabulary

Question 1

need

Answer 1

a good or service that is essential for livint

Question 2

want

Answer 2

a good or service that people would like to have but is not necessary for living, people have unlimited wants

Question 3

economic problem

Answer 3

there are unlimited wants but limited resources to produce the goods and services to satisfy wants, this creates scarcity

Question 4

factors of production

Answer 4

resources needed to produce goods and services. there are 4 factors of production ( land labour capital enterprise) and they are limited in supply

Question 5

scarcity

Answer 5

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

Question 6

opportunity cost

Answer 6

the next best alternative given up by choosing another item

Question 7

specialization

Answer 7

when people and business concentrate on what they are best at

Question 8

devision of labour

Answer 8

when the production process is split up into different tasks and each worker performs one go these tasks, it is a form of specialization

Question 9

business

Answer 9

combines factors of production to make products (goods and services) which satisfy peoples wants

Question 10

added value

Answer 10

it is the difference between the selling price of a product and the cost of bought in materials and components

Question 11

primary sector

Answer 11

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

Question 12

secondary sector

Answer 12

manufactures goods using raw materials provided by primary sector

Question 13

tertiary sector

Answer 13

provides services to customers and other sectors of industry

Question 14

de-industrialization

Answer 14

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

Question 15

mixed economy

Answer 15

has both a private sector and public sector

Question 16

private sector

Answer 16

private individuals owns and runs business ventures

Question 17

public sector

Answer 17

where the government owns and runs business ventures

Question 18

capital

Answer 18

money invested into business by owners

Question 19

entrepreneur

Answer 19

a person who organizes, operates and takes risk for a new business venture

Question 20

business plan

Answer 20

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

Question 21

capital employed

Answer 21

total value of capital used in the business

Question 22

internal growth

Answer 22

when a business expands its existing operations

Question 23

external growth

Answer 23

when a business takes over or merges with another business

Question 24

integrations / merger

Answer 24

when two businesses agree to join their firms together to make one business

Question 25

takeover

Answer 25

one business buys out the owners of another business which then becomes part of the predator business

Question 26

horizontal integration

Answer 26

when one company merges with or takes over another in the same industry in the same stages of production

Question 27

vertical integration

Answer 27

when one company merges with or takes over another firm in the same industry but different stage of production

Question 28

conglomerate integration

Answer 28

when one company merges with or takes over another in a completely different industry

Question 29

sole trader

Answer 29

business owned by one person

Question 30

limited liability

Answer 30

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

Question 31

unlimited liability

Answer 31

the owners of a business can be held responsible for the debts of the business they own. their liability is not limited to be the investment they make

Question 32

partnership

Answer 32

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

Question 33

partnership agreement

Answer 33

the written legal agreement between partners

Question 34

unincorporated business

Answer 34

one that does not have a separate legal entity. sole traders and partnerships are unincorporated business

Question 35

incorporated business

Answer 35

companies that have a separate legal status from their owners

Question 36

shareholders

Answer 36

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

Question 37

annual general meeting

Answer 37

a legal requirement for all companies, shareholders may attend and vote on who they want to be on the board of directors for the coming year

Question 38

dividend

Answer 38

payments made to shareholders from the profit after tax of a company, they are the return to shareholders for their investment in the company

Question 39

franchise

Answer 39

business based upon the use of brand names and trading methods of an existing successful business. franchisees use franchisors ideas, names

Question 40

business objective

Answer 40

aims and targets that a business works towards

Question 41

profit

Answer 41

total income - total costs

Question 42

market share

Answer 42

proportion of total market sales achieved by one business

Question 43

social enterprise

Answer 43

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

Question 44

stakeholder

Answer 44

a person or group with a direct interest in the performance and activities of business