Unit 1 Flashcards
Scarcity
Very little of something
Opportunity Cost
The cost of the next best alternative given up
Specialisation
When someone words in a specific place in a job
Importing
Coming into the country
Exporting
Going out of the country
Public sector
The part of the economy that is controlled by the state or the government
Private sector
The part of the economy that is owned and controlled by individuals and companies for profit
Primary research
The gathering of new information specific to the needs of a business EG Questionnaires
Secondary research
The use of data that is already in existence Eg. Commercial reports and government data
Mixed economy
An economy where there resources are owned and controlled by both the private and the public sectors
Interdependence
Describes how every sector of the economy relies on other sectors
Business Plan
A detailed written document outlining the purpose and aims of a business which is often used to persuade lenders or investors to finance a busines proposal
Sole trader
A business that is owned and controlled by 1 person
Partnership
A business formed by 2 or more people who will usually share responsibility for day to day running of the business
Joint venture
2 more more businesses agree to work together on a project and set up a separate business for this purpose
Franchise
A business system where entrepreneurs buy the right to use the name, logo and product of an existing business
Limited companies
The shareholders in a limited liability company which fails to only risk losing the amount they invested in the company
Private limited companies
Does not publicly trade shares
Public limited company
Legally allowed to sell its shares to the public
Unincorporated business
A business that does not have legal identity separate from its owners. The owners have unlimited liability for business debts
Business activity
The process of producing goods and services to satisfy consumer demands
Need
A good or service which is essential to living
Want
A good or service which people would like, but is not essential for living
Economic problem
Unlimited wants cannot be met because there are limited factors of production. This increase scarcity
Factors of production
The resources needed to produce goods and services, Land, Labour, capital and enterprise
Division of labour
Production is divided into separate tasks and each employee does just one of those tasks
Consumer goods
Products which are sold to the final consumer. They can be seen and touched, for example computers and food
Consumer Services
Non-tangible products such as insurance services, transport
Capital Goods
Physical goods, such as machinery and delivery vehicles, used by other businesses to help produce other goods and services
Tertiary Sector
Firms that supply a service to consumers and other businesses
Chain of production
The production and supply of goods to the final consumer involves activities from primary, secondary and tertiary sector businesses
Entrepreneur
An individual who has an idea for a new business and takes the financial risk of starting up and managing it
Revenue
The amount a business earns from the sale of its products
Business Start-up
A newly formed business. They usually start small, but some might grow to become much bigger
Start up capital
The finance needed when first setting up a business.
Ordinary shareholders
The owners of a limited company
Dividend
A payment, out of profits, to shareholders as a reward for their investment
Collateral
Non current assets offered as security against borrowing
Public corporation
A business organisation that is owned and controlled by the state
Objective
A statement of a specific target to be achieved. It should be SMART
Market Share
The revenue of a business expressed as a percentage of total market revenue
Corporate Social responsibility
Businesses taking responsibility for the impact their activities might have on society and the enviroment
Pressure Group
A group of like-minded people that puts pressure on businesses and government to change their policies to reach a predetermined objective
Social enterprise
A business with social objectives that reinvests most of its profits back into the business or into benefiting society at large
Stakeholder
An individual or group which has an interest in a business because they are affected by its activities and decisions
