Glossary of terms Chapters 1, 6, 2, 3.1

Question 1

Sole trader

Answer 1

a business owned by one individual with unlimited liability. this is an unincorporated business.

Question 2

Primary sector

Answer 2

a business activity that involves extracting raw material.

Question 3

absenteeism

Answer 3

employee’s non-attendance at work without good reason.

Question 4

Adding value

Answer 4

selling a product for more than it costs to produce it.

Question 5

Advertising

Answer 5

paid-for communication with consumers which uses printed and visual media. the aim is to inform and persuade the consumers to buy a product.

Question 6

Currency exchange appreciation

Answer 6

a currency is said to appreciate if the value of the currency is increasing in terms of another currency.

Question 7

Assets

Answer 7

resources owned by a business.

Question 8

Autocratic leadership

Answer 8

a leadership style where the leader makes all the decisions

Question 9

Average cost

Answer 9

the cost of producing a single unit of product.

Question 10

Balance of payments

Answer 10

the difference between the value of export and import goods and services of a country over a year.

Question 11

Bank loan

Answer 11

provision of finance by a bank which the business will repay with interest over an agreed amount of time.

Question 12

Barriers to trade

Answer 12

usually taxes, quotas or bans that one country places on the goods of other countries to prevent or increase the cost of them entering that coutry

Question 13

Bonus

Answer 13

an additional reward paid to employees for achieving targets set by the manager

Question 14

Brand

Answer 14

A name, image or symbol that distinguishes a product from a competitors’ product

Question 15

Brand image

Answer 15

the general impression of a product held by consumers

Question 16

Break-even

Answer 16

the level of output where revenue equals total costs; the business is making neither profit nor loss.

Question 17

Business activity

Answer 17

the process of producing goods and services to satisy consumer demand.

Question 18

Business environment

Answer 18

the combination of internal and external factors that influence the operations of a business.

Question 19

Business plan

Answer 19

a detailed written document outlining the purpose and ais of a bussiness which is often used to persuade lenders or investors to finance a business proposal.

Question 20

Business start up

Answer 20

a newly formed business. they usually start small, but might grow to become much bigger.

Question 21

Capital expenditure

Answer 21

spending by a business on non-current assets such as machinery and buildings.

Question 22

Goods

Answer 22

tangible products that consumers buy to satisfy their needs.

Question 23

Capital goods

Answer 23

physical goods used by other business to help produc other goods and services such as machinery and delivery vehicles.

Question 24

Centralized organization

Answer 24

an organization where all the important decisions is held at a head office, or the centre.

Question 25

Chain of command

Answer 25

the route through which authority is passed down through an organization.

Question 26

Chain of production

Answer 26

the production and supply of goods to the final consumer involving activities from primary, secondary and tertiary sector businesses.

Question 27

Channels of distribution

Answer 27

how a product gets from the producer to a customer.

Question 28

Chief executive office (CEO)

Answer 28

the most senior manager possible for the overall performance and success of a company.

Question 29

Commission

Answer 29

payment to sales staff based on the value of the items they sell.

Question 30

Competitive pricing

Answer 30

setting a price similar to that of a competitors’ products which are already established in the market.

Question 31

Consumer

Answer 31

the final user of a product

Question 32

Costs of sales

Answer 32

the costs of purchasing the goods to make the products sold.

Question 33

Crowd-funding

Answer 33

financing a business idea by obtaining small amounts from a large group of people, most often using the internet or social media networks.