O Level Business Studies - Unit 1 and 2 Practice Flashcards

A complete set of Question and Answer flashcards covering definitions, terms, and key concepts from Unit 1 (Understanding Business Activity) and Unit 2 (People in Business) of the Cambridge O Level Business Studies syllabus.

How is 'opportunity cost' defined?

The next best alternative given up by choosing another item.

What is meant by 'specialisation'?

When people, businesses, or countries concentrate on what they are best at.

What is the definition of 'added value'?

The difference between the selling price of a product and the cost of bought-in materials and components.

How is the 'primary sector' defined?

The sector that extracts and uses the natural resources of the earth to produce raw materials used by other businesses.

What is the definition of the 'secondary sector'?

Businesses that process or manufacture goods using the raw materials provided by the primary sector.

What is the definition of the 'tertiary sector'?

Industries which provide services to consumers and other sectors of the economy.

What is meant by the 'private sector'?

The part of the economy that is owned and controlled by individuals or companies for profit.

How is a 'public sector business' defined?

A state- or government-owned and controlled business.

How is an 'entrepreneur' defined?

A person who organises, operates, and takes the risk for a new business venture.

What is a 'business plan'?

A document containing the business aims/objectives and important details about the operations, finance, and owners of a business.

What is an 'unincorporated business'?

A business that does not have a separate legal identity from its owners.

What is the definition of a 'sole trader'?

A business that is owned and controlled by one person.

How is a 'business partnership' defined?

An agreement between two or more people to jointly own and manage a business.

What is meant by a 'private limited company'?

A business whose shares cannot be sold to the general public, only to friends and family.

What is the definition of a 'public limited company'?

A business owned by shareholders that can sell its shares to the general public through a stock exchange.

What is meant by 'limited liability'?

The liability of shareholders or owners in a company is limited to only the amount they have invested.

What is a 'franchise'?

A business system based upon the use of the brand names, promotional logos, and trading methods of an existing successful business.

How is a 'joint venture' defined?

When two or more businesses agree to start a new project together, sharing risks, capital, profits, or resources.

What is a 'public corporation'?

A business that is owned and controlled by the government or state.

What is the definition of a 'business objective'?

A statement of a specific target that a business works towards.

What is meant by a 'social enterprise'?

A business with social objectives as well as the aim to make a profit, where primary profits are reinvested back into the business or community.

How are 'stakeholder groups' defined?

Any person or group with a direct interest in the performance and activities of a business.

What is the definition of 'motivation' in a workplace context?

The reason, drive, or factor why employees want to work hard and work effectively or efficiently for the business.