What Is A Business Flashcards
Good and services require…
Resources
What is a business?
Organisation that…
- makes as much profit as poss.
- produces goods/services
- where ideas are developed into products/services
- something gov. Encourages because provides jobs
Factors of production: C E L L
Capital-finance/tools of produc.
Entrepreneurship-idea, a person with ability to take risks
Labour- workers- human input
Land- natural resources like oil. Also physical space needed
Define a good
- tangible product
- CONSUMER DURABLE GOODS- used several times, high value e.g fridges
- SINGLE USE- none durable, used in single act e.g food
Define services
-intangible
-include accounting,banking,cleaning
-COMMERCIAL- provide by industry like transport
PERSONAL- fitness trainer
List 4 aims of a business
- gain market share
- increase sales
- make profit
- to survive
Main aims of small business
Survive
Break even
Aims of large business
Gain market share
Gain new customers
Positive public image
Aims should be SMART
Specific Measurable Achievable Realistic Time bound
Aims of small sole trader
Survive each year
Breaks even
Maybe good employee/ good rep.
Objectives of private enterprises
Owners by non gov. Organisations
- profit maximisation
- maximise wealth of shareholders
- growth
- fulfil needs+wants of people
Objectives of public enterprises
Government organisation -provide basic infrastructure -distribute goods/services at reasonable price -employment opportunities Non profit
What is a need?
Necessity for life that helps you survive
E.g food, water clothes
What is a want?
Our desire for certain things
Non essential
E,g cars electronics holidays
Problem with wants
Our wants are infinite, however resources and finite meaning that we have to make a choice
Define scarcity
Our wants are infinite, however resources are scarce meaning that consumers have to make a choice which leaves an opportunity cost
What is an opportunity cost?
It is the value of the next best alternative forgone when making a choice
What is globalisation?
Movement towards economic and social ties between countries through spread of business and trade. Capitalist theory that the world is “shrinking” as it is easier to share and communicate
Globalisation means
Economies now rely on each other. Now opportunity to buy and sell all over the world and be located anywhere
Globalisation is made possible by
Technology Internet Communication networks Collapse of communist Movement of free trade
What are some benefits of globalisation
Increased choices
Greater potential to grow
Economies of scale
More employment opportunities
What are some disadvantages of globalisation?
Larger gap between rich and poor
Domination of rich firms
Poor have less opportunities to get into markets
Exploitation of workers
What is a multinational firm?
A firm operating in a number of countries whether producing, retailing or a combination
Multinationals have…
Huge amount of power
Many factories in less developed countries
Influence over legislation+taxation
