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Theme 1 - key terms - exam board Flashcards

1
Q

What is equilibrium price?

A

The price where supply and demand are equal. Also known as market clearing price.

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2
Q

What are non price factors?

A

Factors other than price e.g. Change in consumer incomes, advertising and seasonality.

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3
Q

What is a shortage in markets?

A

Where demand exceeds supply.

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4
Q

What is a surplus in markets?

A

Where supply exceeds demand.

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5
Q

What are luxury goods?

A

Goods that consumers like to buy if they can afford them e.g. air travel and fashion items.

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6
Q

What are necessity goods?

A

Basic goods that consumers need to buy e.g. food, electricity and water.

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7
Q

What does price elastic mean?

A

Quantity demand is responsive to a change in price.

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8
Q

What is price elasticity of demand (PED)?

A

Measures the responsiveness of quantity demanded to a change in price. (Always negative due to laws of demand).

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9
Q

What does price inelastic mean?

A

Quantity demanded for the product is less responsive proportionately to a change in price.

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10
Q

What is competitive pricing?

A

When a business sets a price similar to competitors selling similar/rival products.

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11
Q

What is cost plus pricing?

A

A cost-based method for setting the prices of goods and services and is calculated by adding a mark-up percentage to the cost of the product.

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12
Q

What is penetration pricing?

A

Setting a low price initially and accepting limited short-term profits/losses in order to build market share before switching to a more profitable and higher price.

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13
Q

What is predatory pricing?

A

Setting a low price forcing rivals out of the market. This is illegal in the UK but difficult to prove.

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14
Q

What are price comparison websites?

A

A website that compares the price of a particular product or service in different stores or from different businesses.

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15
Q

What is price skimming?

A

Setting a high price at the launch of a product, to gain the money back from R&D and to take advantage of those wanting to be the first people to purchase.

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16
Q

What is a pricing strategy?

A

A method used by a business when deciding the price at which a product is sold for.
The approach a business takes to setting the price of its product/service e.g., penetration, price skimming, cost plus, competitive, predatory, psychological.

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17
Q

What is psychological pricing?

A

Tactics that are designed to appeal to a customer’s emotional response to prices.

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18
Q

What is collective bargaining?

A

Negotiation of wages/conditions of employment between employee representatives / trade unions and the employer.

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19
Q

What does dismissal refer to?

A

Referred to informally as firing or sacking. It is the termination of employment by an employer against the will of the employee.

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20
Q

What are employer/employee relations?

A

The way in which a company’s management and its employees behave towards each other.

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21
Q

What is an individual approach in employer/employee relations?

A

When employers develop relationships with employees at an individual level.

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22
Q

What is multiskilling?

A

The process of increasing the skills of employees.

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23
Q

What are part-time employees?

A

Workers that generally work a few hours or a few days a week. Fewer hours than a full-time employee.

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24
Q

What is redundancy?

A

When a business needs to reduce the size of its workforce or even close. Redundancy can be voluntary.

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25
How is staff viewed as a cost?
A cost to businesses in terms of recruitment, training, remuneration, welfare and even severance.
26
How is staff viewed as an asset?
Employers recognise the input of employees as an important business resource. They contribute to the value of output.
27
What is temporary work?
The job position is generally for a limited period of time.
28
What are trade unions?
A workforce representative that act to protect and improve the economic and working conditions for their members.
29
What is external recruitment?
When the business looks to fill the vacancy from outside of the business.
30
What is induction training?
Introductory training given to employees covering its background, policies, health and safety procedures.
31
What is internal recruitment?
Selecting employees who already work within the business to fill job vacancies.
32
What is off-the-job training?
When employees are given training away from their normal job environment, often in a classroom.
33
What is on-the-job training?
Learning/gaining/developing skills whilst at work doing the job.
34
What is recruitment?
The process of finding and selecting workers.
35
What is training?
The developing of a person, to enhance skills and knowledge. Training can be on-the-job or off-the-job.
36
What is a centralised structure?
An organisational structure where business decisions are made at the top of the hierarchy by senior management/or at the headquarters of a business.
37
What is a chain of command?
The way authority and power is organised in an organisation.
38
What is a decentralised structure?
When a business allows branches to take more control/make their own decisions.
39
What is a flat organisational structure?
A structure with few layers and a wider span of control for each manager.
40
What is hierarchy?
The order or levels of responsibility in an organisation, from the lowest to the highest.
41
What is a matrix organisational structure?
Organises employees from different disciplines or divisions into projects/teams.
42
What is an organisation structure?
A diagram that shows who is answerable to whom in an organisation. It can also show vertical and horizontal communication links.
43
What is span of control?
The number of employees/subordinates that a manager is responsible for.
44
What is a tall organisational structure?
One with many layers and a narrow span of control for each manager.
45
What is a bonus?
A sum of money added to an employee's wages/salary as a reward for performance when they reach or exceed their targets.
46
What is a commission?
A payment to a worker based on a percentage of the value of sales.
47
What is consultation?
Employee opinions/feedback are sought when making business decisions.
48
What is delegation?
Authority to pass down from superior to subordinate.
49
What is empowerment?
Giving official authority to employees to make decisions and to control their own work activities.
50
What are financial incentives?
Monetary rewards used to help improve staff motivation and achievement. They can include Piecework, commission, bonuses, profit sharing and performance related pay.
51
What is a flexible workforce?
Employees have choice over how/when they work by agreement with the company. E.g. zero hours contracts, homeworking, part-time. Employees have choice over how/when they work by agreement with the company.
52
What is flexible working?
Offering different working hours/location/pattern of working that improve work-life balance/motivation for employees.
53
What is job enlargement?
Giving an employee more work to do of a similar nature, horizontally extending their work role.
54
What is job enrichment?
Giving employees greater responsibility and recognition by vertically extending their work role.
55
What is job rotation?
The changing of jobs or tasks.
56
What is Maslow's hierarchy of needs?
The order of people's needs, starting with basic human needs.
57
What is Mayo's human relations theory?
Emphasises the importance of the ways in which people interact and how they are treated. Motivation can improve when employees feel more involved.
58
What is motivation?
The reason for people's actions, willingness and goals.
59
What are non-financial methods of motivation?
Non-monetary rewards. Ways of encouraging employees without the use of monetary rewards. Include consultation, empowerment, team working, flexible working and job rotation.
60
What are non-financial techniques?
Ways of encouraging employees without the use of monetary rewards. E.g., delegation, consultation, empowerment, team working, flexible working and job rotation.
61
What is performance-related pay?
A financial reward to employees whose work is considered to have reached a required standard.
62
What is piece rate?
A payment system where employees are paid an agreed rate for every item produced.
63
What is profit sharing?
A form of financial incentive given to employees, where part of the profit of the business is shared amongst the employees.
64
What is Taylor's scientific management?
Suggested a job could be broken down into constituent parts, so that the most efficient way of working could be calculated. He believed workers are motivated by money. Employee pay should be related to the amount of work they do/Money is the most appropriate motivator for employees.
65
What is team working?
Organising people into working groups that have a common aim.
66
What are working conditions?
The physical surroundings and the atmosphere of the workplace, and the way staff are treated by managers.

Business (8 decks)

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