Chapter 1- understanding business activity Flashcards
need
things that are essential for living in order to survive, eg shelter, food, clothing
want
things that people would like to have, but is not essential for living
oppotunity cost
the next best alternative given up by choosing another item
scarcity
limited avaibility of resources to meet unlimited wants of people
specialisation
when the business/people focus on the activities that they are the best at
added value
the difference between selling price and the cost of raw materials used to make it
primary sector
business that extract or collect raw materials
secondary sector
business that take raw materials and manufacture them into finished goods
tertiary
business that provide services to other businesses and individuals
public sector
any business that runs,owned or controlled by the government
private sector
any business run, owned or controlled by private individuals
public corperation
a business organization run, owned by the government
entrepreneur
someone who organises, operates and takes the risk for a new business venture
business plan
contains aims of a business and objectives of a business and important details about its operations, finance and owners
partnership
a business controlled and owned by two or more people
sole trader
a business owned and controlled by one person only
shareholder
any individual/organization that own shares in a business
incorporated business
a business that exists seperately from its business
unincorporated business
a business that do not have a seperate legal identity
limited liability
owners are only liable for the amount invested in the business
unlimited liability
owners responsible for all the debts of the business
private limited company
a business whose shares cannot be sold to the public
public limited company
a business who shares can be freely bought and sold to the general public
franchise
an agreement for a business to trade under the name of another business to sell the other company’s products or services
joint venture
an enterprice undertaken by two or more businesses pooling resources together to work on a specific project
objective
a target that a business wants to reach so that it can achieve its aims
skateholder
any group of the individuals who have any interest of the activities in the business
social enterprise
an organization that put social objectives ahead of the financial objectives
