Economics - Business Vocabulary Flashcards (Pages 1-3 Notes)

Vocabulary flashcards covering key business concepts from Pages 1-3 notes.

Adding value

The process of producing a good or service that is worth more than the cost of the resources used to produce it.

Business

A decision-making organization established to produce goods and/or provide services.

Consumers

The individuals or organizations that actually use a product.

Customers

The individuals or organizations that purchase a product.

Entrepreneurs

Individuals who take risks in overseeing a business organization or venture, usually in pursuit of profit.

Entrepreneurship

The knowledge, skills and experiences of individuals who have the capability to manage the overall production process.

Factors of production

The collective term for the resources used in the production process, i.e. land, labour, capital and entrepreneurship.

Finance and accounts

Function of an organization responsible for ensuring that the business has sufficient funds to conduct daily operations.

Goods

Physical (tangible) products, such as cars, clothes, flowers, food, furniture, smartphones, and toys.

Human resources (HR)

The business function that handles all aspects related to the workforce (staff) within an organization.

Marketing

Business function of identifying the needs and wants of customers so that the organization can provide goods and services to meet these requirements and desires, usually in a profitable way.

Needs

The basic necessities that an individual must have in order to survive, such as food, water, and shelter.

Operations (or operations management)

The business function referring to the process of making goods and providing services from the available resources of a business to meet the needs and wants of its customers.

Primary sector

Business activity involved with the extraction of natural resources, e.g. fishing, mining and agriculture.

Production

The process of creating goods and/or services using the factors of production available to the business.

Quaternary sector

Business activity involving the creation or sharing of knowledge and information.

Secondary sector

Business activity involved with the manufacturing or construction of finished products.

Services

Intangible products, such as haircuts, tourism, public transport, banking, insurance, education, and healthcare.

Tertiary sector

Business activity that involves providing services to customers, i.e. consumers and business clients.

Value added

The numerical difference between the cost of factor inputs in the production process and the price that the final output is sold for.

Wants

The desires of individual customers, i.e., the goods and services that they would like to have rather than necessities, such as a new smartphone or a holiday.