Economics and Business B. Definition of terms P-Z theme 1

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Positive externalities
external benefits that are expereinced by a third party but paid for by someone else
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PLC
stands for Public Limited Company, A company organisation with limited liability but whose shares are available to the public and are quoted on the stock exchange
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Primary research
the gathering or original information about the market obtained through field or first hand research
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Private limited companies
have limited liability but are not able to raise funds /capital from the public
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Private sector
the part of the economy run for private profit and not controlled by the state. this area of the market is owned by individuals
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Product differentiation
each product is given specific design features that distinguish it from its competitors. Branding can be an expamle of this.
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Profit
sales revenue - cost of production
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Profit margin
profit represented as a percentage of turnover
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Profit maximisation
an important business objective, more important to some than others
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Profit-signalling mechanism
the means by which the incentive of increasing profit, encourages businesses to respond to consumer demand
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Public Limted Companies
have limited laibility and can raise finance by selling shares to anyone
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Public sector
industries or services funded or provided by the government and not by private individuals
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Qualitative research
a research method that looks at the motivstion, preferences and wishes of consumers, difficult to quantify
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Quantitive research
a research method thatbanlyses statistical and numerical findings
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Retained profit
an improtant source of finance for expanding a business. it represents the profit after interest, tax and dividends are paid from the operating costs
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Revenue
the income of a business raised by selling its goods and services
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Risks
considers/measures the possibility that an event might not occur
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Sales maximisation
selling as much as possible
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Sampling
during market research, a small sample or section of the market is considered as representational of the whole
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Satisficing
this occurs when a business earns enough profit to keepn the owners comfortable but no attempt is made to maximise profit
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Scarcity
this term describes the way in which the demands do not meet the needs and wants of the consumers
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Secondary research
the use of information about the market that is currently held. this is sometimes referred to as desk research
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Shareholders
are part owners of the business. They may have bought shares from someone, the stock exchange or have played a part in finacing the business
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Skill shortages
this occurs when the demand for people with skills is greater than the supply of people with the correct skill set
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Social benefits
this is the total benefit of producing goods and services, calculated by adding together the private and external costs
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Social costs
the total costs of producing goods and services , achieved by adding together the private and external costs
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Sole trader
the simplest form of business organisation that is woned and operated by an individual. The owner has unlimited liability
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Specialisation
referes to the way people, organisations and economies concentrate on specific economic activities, often because they have an advantage in that field
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Stakeholder
any individual or group with an interest in the actions of a business. Stakeholders can include employees, oweners, shareholders, customers,suppliers and the local community
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Statement of comprehensive income
shows a companies net profit or loss, over a given time period
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Structural change
when patterns of demand change, some industries grow whilst others will downsize or exit the market
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Substitute
a service or good that can be used in place of another
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Supply
the ammount of a goods or service that suppliers are able and willing to produce/provide, at a given price and a given time
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Supply curve
a graphical representation of the relationship between price and quantity supplied
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Taxation
payments made to the government by individuals and businesses to provide revenue for government spending. Also known as VAT, corporation tax, excise duty and income tax
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Trade credit
the time allowed by a supplier before a business must make payment. this is commonly 30-60 days
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Trade off
a situation where having more than one thing leads to having less of another
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Turnover
sales revenue, ie total income generated by a business selling its goods and services over a period of time
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Unemployment
occurs when people are able to work but not able to find employment
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Under-consumption/ under production
less of a product is produced than would be optimal for society as a whole given the roducts external benefits
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Unique selling point
a single feature that makes the product different from those offered by competitors
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Unlimited liability
the owner of a business is responsible for all the debts of the company should it fail. this applies to sole traders and partnerships
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Variable costs
costs of production that varies with the level of output, cost of raw materials, distribution costs
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venture capital
a form of finance, unsecured funding provided by firms or individuals in return for a proportion of the company's shares
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Working capital
finance to cover costs when sales revenue is slow to come in
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Other cards in this set

Card 2

Front

stands for Public Limited Company, A company organisation with limited liability but whose shares are available to the public and are quoted on the stock exchange

Back

PLC

Card 3

Front

the gathering or original information about the market obtained through field or first hand research

Back

Preview of the back of card 3

Card 4

Front

have limited liability but are not able to raise funds /capital from the public

Back

Preview of the back of card 4

Card 5

Front

the part of the economy run for private profit and not controlled by the state. this area of the market is owned by individuals

Back

Preview of the back of card 5
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