Definitions

Question 1

Profit

Answer 1

To make more money than you spend.

Question 2

Unincorporated

Answer 2

The owner and the person have the same legal identity

Question 3

Deed of Partners

Answer 3

Contract between owners (legal agreement)

Question 4

Board of directors

Answer 4

Appointed by the shareholders, define the goals and strategies of the company,(boss: CEO, VP)

Question 5

Controlling interest

Answer 5

To be able to influence the vote of the directors you appointed thanks to your shares (shareholders)

Question 6

IPO

Answer 6

Going public

Question 7

Market Capitalisation

Answer 7

Value of share (price of a share x amount of shares)

Question 8

Retained Profits

Answer 8

Money made that is put back into the business

Question 9

Owner’s Capital

Answer 9

The money the owners of the business have invested into the company

Question 10

Mission Statement

Answer 10

A statement of the business’s core aims phrased in a way to motivate employees and to stimulate interest by outside groups (eg. Consumers)

Question 11

Vision Statement

Answer 11

A statement of what the organisation would like to achieve or accomplish in the long term

Question 12

CSR

Answer 12

Corporate Social Responsibility

Question 13

Exports

Answer 13

goods/services sold abroad

Question 14

Imports

Answer 14

goods/services bought from abroad

Question 15

Cost

Answer 15

Price to produce

Question 16

Price

Answer 16

price to purchase

Question 17

Managerial division of labour

Answer 17

workers are more productive if they are specialised in one task

Question 18

Capital goods

Answer 18

physical goods that are used by industry to produce other goods

Question 19

Consumer goods

Answer 19

physical goods that are made to be sold to customers

Question 20

Secondary sector

Answer 20

an industry that produces manufactured goods

Question 21

Entrepreneur

Answer 21

someone who takes the financial risk of starting and managing a new business

Question 22

Intrapreneur

Answer 22

someone within a large corporation who takes direct responsibility for turning an idea into a profitable product using entrepreneurial talents

Question 23

Business plan

Answer 23

a written document that describes a business it’s objectives and strategies, the market it is in and it’s financial forecast

Question 24

Public Sector

Answer 24

organisation funded & owned by the government

Question 25

Privatisation

Answer 25

when a business that was originally in the public sector is sold to the private sector

Question 26

Partnership

Answer 26

a business with more than one owner (2-20 owners) that have a deed of partners (shared capital investments & shared responsibility)

Question 27

Limited liability

Answer 27

the only liability or potential loss a shareholder has if the business fails is the amount invested in the business

Question 28

Public Limited Company

Answer 28

a company that has shares on the stock market that anyone can buy (they went through an IPO)

Question 29

Social Enterprise

Answer 29

a business with mainly social objectives that reinvest most of its profits into benefiting society and making decisions democratically

Question 30

Cooperative

Answer 30

a group of people acting together to meet the common needs and aspirations of its members sharing ownership

Question 31

NGO

Answer 31

non governmental organisation - which means that it is a type of business that is not funded or supported by the government and that it has to find its own sponsors (a legal constituted body with a specific aim)

Question 32

Charity

Answer 32

an organisation that collects money to distribute it to people in need

Question 33

Opportunity Cost

Answer 33

Cost measured in terms of the next best alternative forgone when a choice is being made; e.g. when deciding to finance a new promotion strategy, employing an extra sales person may need to be foregone.

Question 34

Capital

Answer 34

The finance needed to set up a business and pay for its continued operations or expansion

Question 35

Adding value

Answer 35

The process of increasing the value of a resource in the production process

Question 36

Production

Answer 36

The process of making goods and services from the available factor inputs

Question 37

Land

Answer 37

Natural resources that can be found on the planet. This includes renewable and non-renewable natural resources such as water, wood, fish and physical land itself

Question 38

Labour

Answer 38

The physical and mental human effort used in the production process

Question 39

Added value

Answer 39

The difference between the costs of inputs in the production process and the price of the final output

Question 40

Structural change

Answer 40

A shift in the relative share of national output and employment that is attributed to each business sector; i.e. primary, secondary and tertiary sectors

Question 41

Factors of production

Answer 41

The resources used in the production process

Question 42

Consumer Services

Answer 42

non-tangible products that are sold to the general public and include hotel accommodation, insurance services and train journeys.

Question 43

Division of Labour

Answer 43

The specialization of workers in the provision of goods and/or services by breaking a job down into particular roles or components that are repeated by the same workers

Question 44

Capital goods

Answer 44

are physical goods that are used by an industry to aid in the production of other goods and services, such as machines and commercial vehicles.

Question 45

Consumer goods

Answer 45

are physical and tangible goods sold to the general public. They include cars and washing machines, which are referred to as durable consumer goods. Non-durable consumer goods include food, drinks and sweets that can only be used once

Question 46

Microfinance

Answer 46

the provision of very small loans by specialist finance businesses, usually not traditional commercial banks