Business Terms

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Need
A good or service that is essential for living.
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Want
A good or service which people would like to have, but is not essential for living. (Wants can be limited)
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Economic Problem
Where there are unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity.
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Factors of Production
Resources need to produce goods and services. There are four factors of production (which are in limited supply): Land, Labour Capital and Enterprice.
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Scarcity
Lack of sufficient products to fulfil the total wants of the population.
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Opportunity Cost
The next best alternative given up by coosing something else.
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Specialisation
Occurs when people and businesses concentrate on what they are best at.
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Division of Labour
When the production process is split up into different tasks and each worker performs one of these tasks. It is a form of specialisation.
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Businesses
Combination of the factors of production to make products (goods and services) which satisfy people's needs and wants.
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Added Value
The difference between the selling price of a product and the cost of bought in materials and components.
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Primary Sector
Primary Sector of industry extracts and uses the natural resources of the earth to produce raw materials used by other businesses.
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Secondary Sector
Secondary Sector of industry manufactures goods using the raw materials provided by the primary sector.
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Tertiary Sector
Tertiary Sector of industry provides services to consumers and the other sectors of industry.
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De-industrialisation
The decline in the importance of the secondary, manufacturing sector of industry in a country.
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Mixed Economy
Economy that has both a private sector and a public sector.
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Capital
The money invested into a business by owners.
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Entrepreneur
A person who organises, operates and takes a risk to combine the four factors of production for a new business venture.
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Business Plan
A document containing the business objectives and important details about the operations, finance and owners of the new business.
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Capital Employed
The total value of capital usined in the business.
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Internal Growth
Occurs when a business expands its existing operations.
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External Growth
When a business takes over or merges with another business. It is also often called integration.
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Integration
When one firm is integrated into another one.
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Merger
When the owners of two businesses agree to join their firms together to make one business.
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Takeover or Acquisition
When one business buys out the owners of another business which then becomes part of the 'predator' business (the firm which has taken it over).
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Horizontal Integration
When one firm merges withor takes over another one in the same industry at the same stage of production.
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Other cards in this set

Card 2

Front

A good or service which people would like to have, but is not essential for living. (Wants can be limited)

Back

Want

Card 3

Front

Where there are unlimited wants but limited resources to produce the goods and services to satisfy those wants. This creates scarcity.

Back

Preview of the back of card 3

Card 4

Front

Resources need to produce goods and services. There are four factors of production (which are in limited supply): Land, Labour Capital and Enterprice.

Back

Preview of the back of card 4

Card 5

Front

Lack of sufficient products to fulfil the total wants of the population.

Back

Preview of the back of card 5
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