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Business and Economics > Unit 2 Keywords > Flashcards

Unit 2 Keywords Flashcards

1
Q

Entrepreneurial structure

A
  • this is similar to a matrix structure but on a smaller scale and best suited to a small business with an entrepreneur at the centre.
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2
Q

Define Synergy

A
  • Sometimes the combination of two businesses that have merged yields more than the expected results. often illustrated as 2+2=5
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3
Q

what is the difference between a legal monopoly and a pure monopoly

A
  • a legal monopoly exists when a firm has 25% or more of a market share.
  • a pure monopoly exists when one firm has 100% of the market and no ther firms exist. it is more f a theoretical idea and helps defin the spectrum of competition.
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4
Q

Define Nominal Value

A
  • means that the value is expressed in numerical terms
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5
Q

Define a monopoly power

A
  • it is when a business is big enough to behave like a monopoly and control price or quantity supplied and maintain barriers to entry.
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6
Q

what is chain of command

A
  • the sequence of authority down which instructions are passed in an organisation.
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6
Q

What is the economic cycle

A
  • the fluctuations in the levels and rates of GDP over a period of time. it is sometimes referred to as the trade or business cycle.
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7
Q

What is meant by price elasticity of demand

A
  • measures the proportinately change in the quantity demanded following a change in price.
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7
Q

what are 4 main resources businesses need inorder to produce a good or service.

A

Land

Labour

Capital

Enterprise

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9
Q

what is capacity utilisation

A
  • this measure what proportion of the theoretical maximum possible output is actually produced.
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9
Q

What is Empowerment

A
  • is a term used to describe ways in which employees can make independent decision without consulting a manager
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9
Q

what is monopolistic competition

A
  • this occurs where there are many firms in the market each offering a slightly differentiated product all competing with each other.
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10
Q

Define Real value

A
  • means that the effects of inflation have been removed.
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10
Q

What is SME an abbreviation for

A
  • Small and Medium SIzed Enterprise
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11
Q

what is meant by flexible working

A
  • it is a general term that allows employees to have a more variable work schedule
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11
Q

Market forces, what are they

A
  • the actions of demand and supply in setting price and quantity and determining the allocation of resources.
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12
Q

Define Productivity

A
  • describes how efficiently resources are actually being used, usually by looking at output per unit of input.
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13
Q

define physical capital

A
  • means anything that can be used in the production process, such as buildings, tools and machines
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13
Q

what is the difference between price elastic and price inelastic

A
  • a price elastic is when a chaine in price causes a proportionately bigger change in the quantity demanded
  • price inelastic is when a change in price causes a proportionatel smaller change in the quantity demanded.
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13
Q

Define seasonal unemployment

A
  • Occurs when there is a seasonal variation in demand and people are not employed all year round
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14
Q

What is consumer sovereignty

A
  • this is the idea that it is consumers, who by their buying decisions, determine what goods and services are produced and how our limited resources are used
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14
Q

what is meant by span of control

A

the number of subordinates directly answerable to a manager

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15
Q

Define Kaban

A
  • is the idea that prduction only takes place when a customer hs placed an order. Production is pulled thorugh an assembly line. it doesn’t away with the need to hold stock of the product.
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17
Q

what is capital intensive production

A
  • this is when a firm uses large amounts of capital and relatively little labour.
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17
Q

what is a takeover

A
  • when one firms makes a bid for another and secures over 50% of the shares. the firm that is taken over is swallowed up by the other one.
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19
Q

What is the economic cycle

A
  • the fluctuations in the levels and rates of GDP over a period of time. it is sometimes referred to as the trade or business cycle.
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19
Q

What is a Downturn

A
  • A stage of the economic cycle when boom slows down and the rate of growth of GDP decreases
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20
Q

what is meant by lead time

A
  • the time taken from having an idea to selling the product to a customer.
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21
Q

Define Monopsony

A
  • this occurs when there is only one buyer of a product or service
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22
Q

Define Kaizen

A
  • is the japanese word for continuous improvement. it summarises a whole company approach to quality control.
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22
Q

What is meant by a Knowledge economy

A
  • is where intellectual skillls, knowledge, understanding and ideas are central to economic activity and more important than physical effort.
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23
Q

What is meant by recovery (on the economic cycle)

A
  • is when positive growth GDP increases slowly at first, then gathering pace. it then grows faster it may lead to a boom.
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24
Q

what is organic growth

A
  • when the firm grows internally using its own resources to expand output.
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25
Q

Define normal good

A
  • Any good or service whose quantity demanded rises when incomes rise and falls when incomes falls
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26
Q

what is corporate culture

A
  • covers all those attitudes, customs and expectations that influence the way decisions are made within a business
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26
Q

what is meant by a natural monopoly

A
  • exist when it would be wasteful to have more than one business providing a service because resources would be duplicated e.g. water.
28
Q

what is decentralising

A
  • moving decision making from the central head office and distributing it throughout the organisation, often at branch level.
29
Q

What is meant by Just in time production (JIT)

A
  • is a stock control system that does away with the need to hold large quantities of stocks or raw materials.
30
Q

Define Structural unemployment

A
  • happens when people have the wrong skills for the employment on offer, or are in the wrong place to take up other employment.
30
Q

Define Total Quality Management (TQM)

A
  • refers to employees being involved in quality control and taking responsibility for the their and their team’s work.
31
Q

what is long tail

A
  • the idea that the internet has vastly extended consumer choice, with the results that for many businesses, there is less importance placed on the bestselllers and more on the huge number of niche or one off sales.
32
Q

What is a Duopoly

A
  • when two large firms dominate the market
33
Q

Define human capital

A
  • refers to the knowledge experience and skills of individuals or of the workforce.
35
Q

What is cyclical unemployment

A
  • this caused by a downturn in the economic cycle, and follows the idea that not as much is being spent and so not as much is produced which means fewer workers are need.
37
Q

what is the minimum efficient scale

A
  • the lowest point of the long run average cost (LRAC) curve where average costs are minimised and technical efficiency is achieved
40
Q

Define Income inelastic

A
  • when a change in income causes a proportionately smaller change in the quantity demanded
42
Q

What is allocation of resources?

A
  • This how resources are are shared out or distributed in an economic system
42
Q

what is meant by flexible working

A
  • it is a general term that allows employees to have a more variable work schedule
43
Q

what is abnormal profit

A
  • Any level of profit over and above normal profits
44
Q

what is Job enrichment

A
  • it means giving employees meaningful whole task to do, rather than boring, repetitive fragments of work.
45
Q

Define an Inferior good

A

a good or services that sees an increase in demand following a fall in income and a fall in demand following an increase in income.

46
Q

what does it mean by a profit satisficer

A
48
Q

what is meant by a contingency planning

A

having a plan ready to deal with uncertainty and problems before they occur.

50
Q

Define marketing ethics

A

means applying standards of fairness and morality to markeing and decisions and sratergies.

51
Q

what is inorganic growth?

A

the firms grows by joining up with another firm. This can be done by merger or takeover.

52
Q

what is meant by flexible working

A

it is a general term that allows employees to have a more variable work schedule

53
Q

Define Technical or productive effieciency

A
54
Q

What is meant by recession

A

occurs when there are al least two consecutive quaters of negative growth in GDP.

56
Q

what is meant by concentration ratio

A

This measures the extent to which a market or industry is dominated by a few leading firms. for example an oligopolistic market.

57
Q

What is Empowerment

A

is a term used to describe ways in which employees can make independent decision without consulting a manager

58
Q

What is meant by micromarketing

A

the marketing of products or services designed to meet the needs of very small section of the market

59
Q

Define marketing mix

A

the marketing mix is a term used to describe those tactics and stratergies that a business uses to promote and sell its products orservices. it can also be described as the 4 Price, product, promotion and place.

60
Q

What is an oligopoly

A

is where several large firms dominate the industry and compete with each other

62
Q

what is Diseconomies of scale

A

when the average cost per unit increases as the business increases in production.

63
Q

what is uncertainty

A

it is simply an expression used to describe anything that is unpredictable and beyond the control of the buisness.

65
Q

what is labour intensive production

A

uses large amount of labour and relatively little capital

66
Q

Define Structual change

A

happens when economies change over time, patterns of demand change and the make-up and nature of the business in our economy evolves and changes.

67
Q

What is matrix management

A

in this organisation individuals are assigned to teams according to their specailism and work on a particular project.

68
Q

Define Hierarchical organisation

A

in a hierarchical organisation employees are ranked in layers. Each layer is one above the other and has fewer layers than the one below it.

68
Q

Define normal profit

A

it that level f profit needed to keep a business or resource in operation. Any less and they will exit the market.

70
Q

Explain the profit signalling mechanism

A

this means by which resources are allocated. the presence of profit in a market attracts more resources and loss sends them away.

BUYERS DECIDE WHAT IT IS THEY WISH TO BUY

THIS CREATES THE DEMAND FOR THE PRODUCT

PRODUCERS SEE THE CHANCE TO MAKE A PROFIT BY PRODUCING THE PRODUCT OR SERVICE

RESOURCESS ARE THEN ALLOCATED TO PRODUCE THE PRODUCT OR SERVICE

THE EXISTENCE OF PROFIT ENCOURAGES MORE BUSINESS TO JOIN THE INDUSTRY

72
Q

Define Income elastic

A

when a change in income cause a proportionately bigger change in the quantity demanded.

73
Q

what is perfect compeetition

A

A highly theoretical market where the competition is at its highest andd purest with countless buyers and sellers and indetical products.

74
Q

Define Regional unemployment

A

is the rate of unemployment in different areas thoughtout a country

75
Q

what is corporate culture

A

covers all those attitudes, customs and expectations that influence the way decisions are made within a business

76
Q

Define X-inefficiency

A

happens when there is a lack of competition in a market and the dominant firm has little or no incentive to control cost or resource use. it is usually associated with monopolies.

77
Q

What is boom

A

a time of rapid growth and expansion in the economy

78
Q

what is lean management

A

is a general term given to any system of production that tries to minimise costs during production process.

79
Q

What is allocative efficiency

A

This is achieved when resources are used to yield the maximum benefit to every one. It is possible to redistribute them without making someone worse off.

80
Q

what is monopsony power

A

the ability to drive down the costs of inputs becuase you are the only buyer, or at least a big enoungh business to behave like a monopoly.

81
Q

Explain the spectrum of competition

A

a range of market structures with the two extremes of monopoly and perfect competion at each end. somehwere in the middle lie all markets.

82
Q

What is Barriers to entry

A

Anything that prevents firms from entering a market, including start-up costs, branding, patents.

83
Q

what is a merger

A

is the joining together of two or more firms into a single dusiness with the pproval if the shareholders and management concerned.

84
Q

what is Diseconomies of scale

A

when the average cost per unit increases as the business increases in production.

85
Q

what is meant by a contingency planning

A

having a plan ready to deal with uncertainty and problems before they occur.

86
Q

what is decentralising

A

moving decision making from the central head office and distributing it throughout the organisation, often at branch level.

87
Q

what is meant by income elasticity of demand

A

measures what the proportionate change in the quantity demanded following a change in income

88
Q

what is a free market economy

A

A free market is one where there is no interference from outside interference

Business and Economics (3 decks)

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