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Business Studies > External Influences > Flashcards

External Influences Flashcards

1
Q

Demand

A

The amount of a good / service that customers are willing to buy at any given price

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2
Q

Supply

A

The amount of a good or service that seller are willing and able to sell at any given price

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3
Q

Equilibrium price

A

The situation in the market where demand is equal to supply and both parties are happy. In theory, customers can buy what they want and shops have no unsold stock.

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4
Q

Price

A

How much a product costs. Can affect demand

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5
Q

Income

A

The amount that someone earns.

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6
Q

Wealth

A

The combined value of someone’s assets. (Money, shares, property value etc.)

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7
Q

Excess supply

A

The producers are producing more goods than are demanded. Shade the bottom of the graph.

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8
Q

Excess demand / Shortage

A

Consumers are demanding more than the seller can provide. Shade the top of the graph

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9
Q

Elasticity of demand

A

How sensitive / responsive quantity demanded is to a change in price.

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10
Q

Inelastic demand

A

The quantity is insensitive / unresponsive to a change in price.

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11
Q

Elastic demand

A

Quantity is sensitive / responsive to a change in demand

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12
Q

Demographic changes

A

Changes in the size and composition of a population OR the characteristics of human population groups.

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13
Q

Taste and fashion

A

The products that are popular at the time, that customers will want to buy. An example is jumpers in winter

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14
Q

Government action

A

A campaign by the Government to promote or discourage something or the Government providing subsidies to businesses to help them grow.

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15
Q

Substitutes

A

Alternative goods that can be used for the same purpose

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16
Q

Complements

A

Products that are bought together and used in conjunction, like a printer and printer ink.

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17
Q

Demand factors

A

Wealth, Advertising, Taste and fashion, Government action, the price of other products (subsidies and complements)

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18
Q

Supply factors

A

Price, Costs, Taxes, Subsidies, price of other products

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19
Q

Subsidies

A

Money from the Government given to a business it believes to be beneficial. A payment for every unit supplied.

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20
Q

Competitive supply

A

A fall in the price of one product makes it more profitable to supply another.

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21
Q

Competition

A

Rivalry amongst sellers

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22
Q

Market

A

Any situation where buyers and sellers are in contact to establish price

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23
Q

Non-physical market

A

A business with no physical storefront, exist because of the convenience that they offer

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24
Q

Physical market

A

A business with an actual storefront, exist still because of the personalisation that they offer

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25
Q

Online market

A

Tangible products that are shipped to you

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26
Q

Digital

A

Products with no physical form which are downloaded

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27
Q

Competitive market

A

A large number of firms compete to sell similar products. They compete on price.

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28
Q

Monopoly

A

A market theoretically dominated by one seller, but in reality one business holds at least 25% of the market

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29
Q

Economies of scale

A

Average costs fall as output increases

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30
Q

Oligopoly

A

A market dominated by a few firms who compete on non-price differences. Suggested that they collude.

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31
Q

Collusion

A

An illegal action where rival businesses cooperate for mutual benefit, often agreeing on setting high prices to push out competitors

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32
Q

Market price

A

The range of prices that that most people would be willing to pay for an item.

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33
Q

Mark-up

A

Difference between the selling price and the production costs, the profits

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34
Q

Revenue

A

The total amount of money a business receives in sales

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35
Q

Profit

A

The amount of money that a business makes once costs have been taken off

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36
Q

Monopolistic competition

A

Many firms compete on non-price differences.

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37
Q

Market size

A

The collective value of the goods/services that buyers purchase

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38
Q

Market growth

A

The percentage change in the size of the market, measured over a specific period

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39
Q

Market share

A

The percentage of total sales by value that a business has in a specified market

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40
Q

Reasons to enter a market

A

Achieve social objectives, make profit, exploit a gap in the market, personal objectives

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41
Q

Barriers to entry

A

A factor that could prevent a firm from entering and competing in a market

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42
Q

Example of barriers to entry

A

Large start-up costs, large marketing budget to break loyalties, the inability to gain EoS, the possibility of a price war, legal restrictions (patents)

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43
Q

Barriers to exit

A

The factors that could prevent a firm from leaving a market

44
Q

Examples of barriers to exit

A

Difficulty in selling capital, high redundancy costs, contracts with suppliers

45
Q

Market dominance

A

A measure of market share compared to competitors

46
Q

Market power

A

The ability of a firm to influence or control the terms on which goods are sold

47
Q

Merger

A

Two business come together to form an entirely new business entity. Consent is given by both parties.

48
Q

Acquisition

A

One business buys a majority share in another and takes it over.

49
Q

Organic growth

A

Expansion within a business by increasing sales and increasing market share

50
Q

The CMA

A

The competition and markets authority, can stop mergers and acquisitions from taking place and investigates market dominance and anti-competitive practices

51
Q

Inflation

A

The general tendency of costs in the economy to rise

52
Q

Consumer Price Index

A

The average price of a basket of shopping. The price in one quarter is compared to the next

53
Q

Causes of inflation

A

Cost inflation- business costs increasing

Demand pull- more people will buy the product

54
Q

Gross Domestic Product (GDP)

A

The total value of output produced in an economy in a year

55
Q

Standard of living

A

The degree of wealth and material comfort available to a person or community

56
Q

GDP per capita

A

A measure of economic output that accounts for its number of people. Good for measuring standard of living

57
Q

Economic growth

A

The annual percentage change in GDP

58
Q

Recession

A

Two consecutive quarters of negative growth

59
Q

Exchange rate

A

The value of one currency in terms of another

60
Q

Strengthening exchange rate

A

The pound will buy more of a foreign currency

61
Q

Weakening exchange rate

A

The pound buys less of a foreign currency

62
Q

Import

A

A sale which leads to money leaving a country or economy

63
Q

Export

A

A sale that leads to money coming into a country or economy

64
Q

Factors that influence demand for the pound

A

Desire for UK exports
Foreign investment
Interest rates

65
Q

Interest rates

A

The reward for saving and the cost of borrowing expressed as a percentage of the money saved or borrowed

66
Q

Unemployment

A

A situation in which people who are able and willing to work are not able to find employment

67
Q

Cartel offences

A

Where businesses agree not to compete, either by price fixing, market sharing or bid rigging

68
Q

Balance of payment / Trade

A

Difference between the value of exports and imports

69
Q

Taxation

A

A compulsory payment to the Government

70
Q

Indirect Taxes

A

A tax on expenditure/spending. Paid to the tax authorities, not by the consumer, but by the suppliers of the good or service

71
Q

Direct Taxation

A

Taxes on income and profits, paid directly by the bearer to the tax authorities

72
Q

Income tax

A

Tax taken out of a person’s income. Those earning more pay more

73
Q

National insurance

A

Taken out as a contribution to the state pension and NHS

74
Q

Corporation tax

A

A tax on profits made by companies (not paid by sole traders and partnerships)

75
Q

Stamp duty

A

Tax paid on the purchase of property

76
Q

Subsidy

A

Payments by the government to suppliers. The effects is to increase the supply pay of particular goods

77
Q

Supply side policies

A

Policies aimed to improve the economy’s overall productive capacity

78
Q

Business cycle

A

The observed pattern of increases and decreases in economic growth measured by % gdp over the long term

79
Q

4 stages of the business cycle

A

Boom
Recession
Slump
Recovery

80
Q

EU

A

The economic and political union of most European states aimed at reducing trade barriers and harmonising economic policy

81
Q

Demographics

A

The characteristics of human population groups, e.g the size of the population

81
Q

What types of environmental problems do business operations cause?

A 
Air pollution
Water pollution
Land pollution
Noise pollution
Congestion (vehicle pollution)
82
Q

Sustainability

A

The endurance of resources. Refers to preventing negative impacts from economic systems and production the Earth and its environment

82
Q

Ethics

A

Concerned with the judgement about whether something is morally right or wrong

83
Q

National minimum wage

A

The minimum pay per hour workers of school leavers age are entitled to by law that is reviewed every year by the Government. The rate for age groups is different

83
Q

National living wage

A

The new minimum wage rate for those 25 and over

84
Q

Intellectual property

A

Intangible property that is the result of creativity. E.g a song’s melody

84
Q

Trademark

A

A company can register a trademark for a name logo etc, anything that brands their products or company

85
Q

Copyright

A

Legal protection against copying for authors, composers and artists. It is automatic and doesn’t need to be applied for

85
Q

FCA

A

Financial Conduct Authority

86
Q

Clean air act

A

Act to reduce smoke levels by introducing smoke free zones where only smokeless fuel can be burnt

86
Q

Environmental protection act

A

Deals with waste, places the responsibility to dispose of waste on local authorities. Business must handle waste properly and within the law

87
Q

Globalisation

A

The increased integration and interdependence of national economies OR the world coming together to trade in each other’s markets

89
Q

Strategy

A

A plan of action

90
Q

Multinational

A

A business that has activities and operations in in more than one country

90
Q

Global strategy

A

A plan of action on a global scale

92
Q

Brand

A

A distinctive product offering created by the use of a logo, symbol, name,design, packaging or a combination thereof

93
Q

Global brand

A

A brand that is recognised throughout much of the world

93
Q

International trade

A

Selling across borders, exchange of goods and services between countries

95
Q

Free trade

A

Trade without tariffs or quotas being imposed on products

97
Q

Protectionism

A

Taxing imports to protect domestic industries

99
Q

Trading bloc

A

A group of countries within a particular geographical region that have reduced or removed trade barriers for its member countries

101
Q

Emerging market

A

Term used to describe a country that is achieving rapid economic growth

103
Q

Digital revolution

A

Involves the shift from analogue to mechanical to digital technology

105
Q

Information Age

A

A time when large amounts of information is widely available

Business Studies (7 decks)

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