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Business Studies External Influences > Key Concepts > Flashcards

Key Concepts Flashcards

1
Q

Substitute

A

A replacement for a product you use. It will be very similar. Alternative product which serves the same purpose

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2
Q

Competition

A

Refers to rivalry among sellers

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3
Q

Market

A

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

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4
Q

Competitive market

A

A market in which there are a large number of sellers. Competition is mainly based on price

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5
Q

Monopoly

A

A market dominated by one seller (25%)

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6
Q

Demand

A

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

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7
Q

Supply

A

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

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8
Q

Equilibrium price

A

The situation in a market where demand is equal to supply

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9
Q

Inelastic

A

Insensitive to change in price (not many substitutes)

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10
Q

Elasticity of demand

A

Measures how sensitive quantity demanded is to a change in price

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11
Q

Inelastic demand

A

The quantity demanded is insensitive to a change in price

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12
Q

Elastic demand

A

The quantity demanded is sensitive to a change in price

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13
Q

Complement

A

A product that should be sold alongside another- they work together (eg a DVD player and a dvd)

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14
Q

Economies of scale

A

They arise when unit costs fall as output rises

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15
Q

Oligopoly

A

Exists where a market is dominated by a few firms (eg mobile phone network market)

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16
Q

Collusion

A

When two or more parties act together to influence production and/ or price levels, thus preventing fair competition. It is illegal but difficult to prove.

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17
Q

Monopolistic competition

A

A market structure with many competing firms each of which supplies slightly differentiated products

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18
Q

Market size

A

Expressed as the collective value of the goods/ services that buyers purchase

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19
Q

Market growth

A

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

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20
Q

Market share

A

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

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21
Q

Barriers to entry

A

The factors that could prevent a firm from entering and competing in a market

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22
Q

Barriers to exit

A

The factors that could prevent a firm from leaving a market, even if it wanted to

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23
Q

Merger

A

This is where two companies join together to form a new larger business

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24
Q

Acquisition/ takeover

A

This is where control of another company is achieved by buying a majority of shares

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25
Q

Market dominance

A

A measure of market share compared to competitors

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26
Q

Market power

A

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

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27
Q

Organic growth

A

Growth from within the business

28
Q

Globalisation

A

The world coming together to trade in each others markets

29
Q

Multinationals

A

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

30
Q

Strategy

A

A plan of action

31
Q

Global strategy

A

Companies that are keen to operate on a global scale must consider how to build a competitive global advantage

32
Q

Brand

A

A distinctive product offering created by the use of a logo, symbol, name, design etc. The key in designing and building a brand is to be different from competitors

33
Q

Global brand

A

Brands that are recognised throughout much of the world

34
Q

European single market

A

A single market which seeks to guarantee the movement of goods, capital, services and labour within the EU

35
Q

European Union

A

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

36
Q

Free trade

A

Involves agreement between countries between countries to trade with each other without erecting barriers to trade

37
Q

Quota

A

Limit on the total quantity of a product can be imported in to a country in a given period

38
Q

Tariffs

A

A duty paid on imports

39
Q

Demographics

A

The characteristics of human population groups

40
Q

Ethics

A

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

41
Q

Sustainability

A

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

42
Q

GDP

A

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

43
Q

Economic growth

A

The annual percentage change in GDP

44
Q

Standard of living

A

The amount of goods and services a person can buy with their income in a year

45
Q

Inflation

A

Persistent general tendency of prices in the economy to rise

46
Q

Trading bloc

A

A group of countries (eg the EU) within a particular geographical region that protect themselves from imports from non-memebers

47
Q

Emerging markets

A

A country that is achieving rapid growth as well as industrialisation. (Development of the secondary and tertiary sectors)

48
Q

Digital revolution

A

Encompasses the shift from analog and mechanical technology to digital technology

49
Q

Information Age

A

A time when large amounts of information is widely available

50
Q

Consumer price index (CPI)

A

A measure that examines the weighted average of prices of a basket of consumer goods/ services

51
Q

Exchange rate

A

The value of money of one currency in terms of another

52
Q

Import

A

When money leaves the uk

53
Q

Export

A

When money enters the uk

54
Q

Interest rate

A

The cost of borrowing and reward for saving expressed as a percentage

55
Q

Unemployment

A

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

56
Q

Balance of payment/ trade

A

Difference between the value of exports and imports

57
Q

Indirect tax

A

Taxes on expenditure. They are paid to the tax authorities, not by the consumer, but indirectly by the suppliers of the good or service

58
Q

Direct tax

A

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

59
Q

Income tax

A

A tax taken out of a persons income

60
Q

National insurance

A

This is taken as a contribution towards the state pension and treatments under the NHS

61
Q

Corporation tax

A

A tax on profits made by companies

62
Q

Subsidy

A

Payments by the government to suppliers that reduce their costs. The effect of a subsidy is to increase supply and the market equilibrium price

63
Q

Fiscal policy

A

Economic policy conducted by the government through taxation and public spending

64
Q

Monetary policy

A

Manipulation of the level of demand in the economy using the rate of interest

65
Q

Multiplier effect

A

The effect of changes in the economic activity in one sector on another sector

66
Q

Supply side policies

A

Aim to improve the economies overall productive capacity

67
Q

International trade

A

Refers to selling across borders (eg the exchanging of good/ services between countries)

Business Studies External Influences (8 decks)

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