economics

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what is revenue ?
Revenue is the income earned by a business over a period of time.The amount of revenue earned depends on two things - the number of items sold and their selling price
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what is productivity ?
Productivity is an measure of output per unit of input
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what is cost ?
Costs are the expenses involved in making a product. Firms increase costs by trading
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what are the 2 types of business objectives?
Financial & non-financial
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what is a fixed cost ?
cost that do not change in relation to ouput/ how many sales are made
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what is a variable cost ?
costs that have a direct relationship with output / how many sales are made.
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what is the total cost?
the sum of all the business costs
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what is total revenue ?
Total flow of income to a firm from selling a given quantity of output at a given price, less tax going to the government
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what is average cost ?
revenue per unit , and is found by dividing the total revenue by the quantity sold. average revenue is equivalent to the price of the product.
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what is profit ?
reward gained by risk taking entrepreneurs when the revenue earned from selling a given amount of output exceeds the total costs of producing that product
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what is a producer ?
a producer makes and supplies goods and services they van be individuals, firms or governments using th factors of production
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what are the factors of production ?
the resources in an economy that can be used to make goods and services eg; land , labour , capital and enterprise
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what is production ?
the measure of the efficiency of factors of production , measured for example by output per person emplyed or output per person hour.
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what are the 2 types of producers ?
individuals & firms
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what is the economies o scale ?
the cost advantages a firm can gain by increasing the scale of production, and as a result the average cost of production falls as output rises
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what is technical ?
machinery / equipment
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how have economies increased dimensions ?
increased storage / shipping volume goes up more than related costs- = reduced cost per unit
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what is puchase and bulk buying ?
lower cost per unit offered by supliers for buying in large quantities
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what is division of labour ?
dividing work into specialised groups of workers , therefore more productive
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what is finance ?
larger companies are able to borrow more money and at a lower intrest rates , also they areable to sell shares.
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what is managerial ?
larger firms can afford to employ specialists to manage and improve departments
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what is marketing ?
larger firms can use more expensive marketing methods and reach many more customers ; mass media such as tv. this cost can be spread out pver the huge number of products they sell = reduced cost of marketing per unit
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what is risk bearing ?
large firms can spread risk by providing a wide range of products and services.
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what is research and development ?
large firms can afford to have their own R&D department , allowing them to saty ahead of the competition.
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what is the equation to work out total cost ?
total cost = fixed cost + variable cost
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what is the equation to work out average cost ?
average cost = total cost / units made
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what is the equation to work out total revenue ?
total revenue = price x quantity
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what is the equation to work out average revenue ?
avrage revenue = total revenue / quantity
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what is the equation to work out profit ?
profit = total revenue - total cost
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Other cards in this set

Card 2

Front

what is productivity ?

Back

Productivity is an measure of output per unit of input

Card 3

Front

what is cost ?

Back

Preview of the front of card 3

Card 4

Front

what are the 2 types of business objectives?

Back

Preview of the front of card 4

Card 5

Front

what is a fixed cost ?

Back

Preview of the front of card 5
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