Studied by 9 people
Topics include : Price Theory; Sectors of the Economy; Trade unions ; Functions of a business; Business Plan
Demand
The quantity of a good or service that consumers want to buy when the good or service is at a specific price
Law of demand
Law in economics that states that consumers buy more of a good or service when its price goes down, and less of a good or service when its price goes up
Demand on a price graph
movement along the curve : downward sloping
when graph shifts : it moves to the right
Supply
How much of a good or service is available for consumers to buy
Law of supply
Law that states that if demand stays the same, when the price of a good or service increases, the quantity supplied increases and when the price of a good or service decreases so does the quantity supplied
Supply on a price graph
movement along the curve : upward sloping
when graft shifts : it moves to the left
Equilibrium price
The price of a product when demand equals supply
Factors that affect demand
New technology changes in consumer's preferences Changes in a country's population Price Income levels
Factors that affect supply
Natural disasters New production technology Government regulations The cost of production inputs Producers' expectations about products and services
Primary sector
Economic sector in which businesses use land and natural resources as raw materials
farming, fishing, forestry, mining
Secondary sector
Economic sector in which people use raw materials from the primary sector to process or manufacture things people can use
food and drink factories, textile factories, clothing manufacturers, bottling plants
Tertiary sector
Economic sector in which businesses offer services to the public
schools, hospitals,, banks, restaurants
Organized worker
A worker who belongs to a trade union
Blue-collar workers
People who usually work outside or in a factory and use mostly their hands and physical labor in their jobs
White-collar workers
People who work in an office and who use their minds more than physical labor
Trade union
An organized association of workers in a trade, group of trades, or a profession, that is formed to protect and further the worker's rights and interests
controlled, run and paid for by its workers
negotiate with employers to get the best deal for their members(wages, hiring/firing, working conditions)
There are trade unions for....
General workers - skilled and unskilled employees in a range of industries
Tradesmen - employees with particular skills
Blue-collar workers - skilled and unskilled workers in a particular industry
White-collar workers - professionals such as teachers
Role of trade unions
When workers feel that employers are not listening to them, their trade unions can organize industrial action
Trade unions can organize the following
Workers can:
stop working and strike
stop working overtime or work less overtime
advertise their problems with posters and protests
Industrial action
Strike = don't go to work
Go-slow = work slower to reduce productivity
Picketing = stand outside premises with posters
Lock-out = close business doors to keep employees out
Trade unions also...
Work to get the government to pass laws that will improve member's lives
Provide professional training and legal advice
Represent workers' interests during disputes with employers
Collective bargaining
When trade unions negotiate workers' rights with employers
Responsibilities of trade unions
Trade unions must :
negotiate with employers to improve their workers' conditions
try to attract new trade union members
help to settle disputes between employers and employees
help to bring about peaceful workplace
Business function
An operation or process that people in the business perform often to help the business to achieve its objectives
The administrative function
Runs the administrative side of the business
Characteristics of the administrative function
performing daily tasks such as answering phone calls
filing information
planning
scheduling
record-keeping
The purchasing function
Responsible for procuring or buying all of the raw materials and finished goods that a business needs to functions
Responsibilities of the purchasing function
acquiring raw materials at the best possible price
making sure that purchases stay within budget
keeping accurate records of purchases
The marketing function
Makes potential customers aware of the business's goods/services
Responsibilities of the marketing function
determine how the business and its goods should be branded to have the biggest impact on potential customers
to advertise and promote goods
provide publicity for the business and its goods
find a target market for the goods
The finance functions
Manages all of the aspects of the business's finances
Responsibilities of the finance function
managing the cash flow of the business
managing the budgets of the business
keeping records of income and expenses
paying the business's tax
The public relations function
Is about giving businesses positive publicity, it communicates with the public about what the business does
Role of the public relations function
finds out about how the public sees the business
gives advice to senior management about how the business can improve public opinion about it
communicates with the public to create a positive image of the business
runs promotional events
The human resources function
Manages the people in a business, it looks after the welfare of employees
Responsibilities of the human resources function
recruiting or hiring staff
defining job descriptions
dismissing an retrenching staff
administering staff leave
training staff
The production function
Manages all aspects of the production function
Responsibilities of the production function
getting resources or inputs required for the production process
managing efficiency and quality
choosing the best production method
controlling production costs
The general management
Oversees and manages all of the other business functions
Responsibilities of the general management function
plans and strategizes at a high level
keeps the business on track
oversees all of the other functions
ensures that the functions work together and communicate with one another
Business plan
Formal or written plan that gives a detailed description of how a business is going to achieve its goals
Concept of a business plan
written when people want to start a new business, they use it to apply for finance or start-up capital
also used by existing businesses when they plan to change the nature of their business/when they want to apply for finance for expanding the business
Format of the business plan
front cover
table of contents
description of goods/services offered
goals
who owns the business
production, marketing and management plan
SWOT analysis and conclusion
financial plan
Description of goods/services offered by the business
nature of business
goods and services offered
description of location
what makes the business's goods unique
whether the pricing is luxury or budget
Front cover of the business plan
logo of your business
name of your business
name & title/position in the business
slogan of your business
date on which the plan was prepared
Goals of the business
vision statement = statement of what the business aims to achieve in the medium or long term
the business's short and long term goals
Owner of the business
business name, the name you have registered
form of ownership
where the business is based
names of all owners
brief description of the business experience that the owners have
Production plan of the business
Needs to show that production operations are efficient, cost effective, organized and reliable. Needs to specify the following:
where the business gets its raw materials form
what equipment and machinery is used
what equipment and machinery they already have and what it still needs to get for manufacturing
Batch production
System that makes a batch of goods of one kind and then moves on to another kind
Mass production
System that used 1 continuous system to make a high number of goods of the same kind
Job production
System that businesses use when they produce once-off goods that are all different
Marketing plan of the business
Explains how the business is going to market its goods and services, needs to convey what is unique about the goods and services.
Contents of the marketing plan of the business
marketing aims
how your goods/services will benefit customers
target market
information about competitors
your plan to advertise & brand your business
Management plan of the business
Investors can see whether the managers of the business have enough skills and experience to make the business succeed.
Contents of the management plan of the business
names of all the business's management staff
details about their work experience in managerial positions
other businesses they have managed\
who will run the business
CVs of all management staff
Financial plan of the business
No business will work if it is not financially feasible
the part that potential investors will remember the most
Credit
An arrangement with a business to pay later for something you buy
Creditworthy
Able to be trusted to pay back money that is owed; safe to lend money to
Credit limit
The maximum amount that the business is willing to allow the person to buy for on credit
Credit agreement
An agreement between a business and a person/business applying for credit, a legally binding document signed by both parties
Terms of credit
How long the person has to pay the credit amount back
Debtor
Person or business owing money to the business
Database
An organized set of data that is stored in a computer and can be looked at and used in various ways- for debtors, a list of all their names, addresses and telephone numbers needed to send out statements and follow up on payments owing
Advantages of credit to a business
Gains more clients
Can charge more for goods bought on credit
Can use the database of debtors (marketing purposes)
Disadvantages of credit to a business
Administrative costs
Risk of bad debts or non-payments
Transactions are more time consuming
Advantages of credit to a consumer
Can buy more expensive goods immediately
Can take advantage of sales or special deals
Can create a credit-worthy reputation
Disadvantage of credit to a consumer
Pay more for goods
Note 
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