Business Key Terms

Key terms of unit 3 of the nuffield book.

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Unit 3

Breakeven Point - Occurs where total cost is equal to total revenue.

Total revenue - is the number of items sold multiplied by the selling price

dividends - are part of the profits made by the company and paid to shareholders

liquidity - is the ability of the business to change assets into cash quickly. A factory is not a liquid asset but debtors may be.

High purchase - involves a business or an individual buying an asset over a long period. each month a regular payment is made until, by the end of the period, the whole amount is paid and the business owns the asset.

collateral - is security provided by a business just in case the business is unable to repay its loan, e.g. you may borrow some money against the security of the factory or office premises.

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Unit 4

Economies of scale - are the reasons why the average cost of production may fall with increasing levels of output.

externalities - are costs or benefits arising from business activity that are experienced by people or organizations outside the firm.

decentralization - means unsuring that decisions are taken at a level as close as possible to the people whom they will affect.

transnational - enterprises are those that have business interests in several countries.

GDP - is a measure of the value of total output from all the businesses in the economy.

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