Pages in this set

Page 1

Preview of page 1
Business and

Unit 2
Multiple Choice
o definition
o why yes
o why no
Long Questions
o Knowledge
o Application
o Analysis
o Evaluation

Supply and Demand
Market clearing point

the balance between demand and supply for a product within the economy

This is efficient because:…

Page 2

Preview of page 2
the total of something within a market/ the economy

Key markets within the economy

Consumer markets sell to the end user
Commercial market business to business selling
Financial market mechanism that allows people to buy and sell financial
Commodity markets where aw or primary products are exchanged

Page 3

Preview of page 3
renewable can be used and replaced
sustainable resources ones which are exploited economically and replaced
so as to maintain their numbers
non sustainable resources ones which are exploited economically and may
run out
human capital education and training increases the value of the workers
working capital stocks of material that…

Page 4

Preview of page 4
Steep curve/inelastic:

Highly addictive
Few alternatives
Highly fashionable

Shallow curve/elastic:
Many alternatives
Brand loyalty
Not addictive

Demand Elasticity

Elasticity is a measure of how much the quantity demanded will be affected by a
change to price.


measures the responsiveness of quantity of demanded to changes in price…

Page 5

Preview of page 5
If the YeD is negative = Negative income elasticity
demand will fall as income rises. Such as inferior goods.

If the YeD is 0 = Zero income elasticity
demand doesn't change when income rises

If the YeD is between 0 and +1 = Income elasticity
demand rises by a smaller…

Page 6

Preview of page 6
how similar are goods
to what level knowledge is shared
extent to which firms affect each other

Barriers to entry and exit


high startup costs
saturated market
patents and legal barriers
trade restrcitions


asset write offs
closure costs
loss of business reputation…

Page 7

Preview of page 7
Limit pricing
price set up by a monopolist to discourage entry into a market. Illegal in some

a secret agreement to fix pricing or marketing strategy

Firms in a competitive market will:

lower prices to compete with other products
differentiate their products
control costs
easy entrance and exit…

Page 8

Preview of page 8
What affects organisation structure:

Skills of workers
Function of business
Success of business
Size of business
Market and competitors


A management decision to remove a layer of hierarchy may cause problems
for a firm in the short term as it may cause miss communication and
employees to…

Page 9

Preview of page 9
o Enables experts to work together
o Improved communication
o Difficult to supervise
o Non useful for large organisations
o Suitable for organisations with fast changing situations

Levels of hierarchy
levels of management within a business organisation from lowest to highest.

Chain of command
the way power is passed down…

Page 10

Preview of page 10
providing sufficient freedom and selfregulation for subordinates to make a
contribution to shaping their working life's

Job enrichment
involves giving employees the opportunities to use their abilities on meaningful tasks
rather than repetitive actions.

Job enlargement
means increasing the work range of tasks involved in a job.



No comments have yet been made

Similar Economics & Business Studies resources:

See all Economics & Business Studies resources »