IGCSE Business Studies: Business Activities, Organisations, Classification, and Location

Comprehensive vocabulary flashcards covering IGCSE Business Studies Topic 1, including business activities, types of business organisation, economic classification, and business location decisions.

Need

Any good or service which people must have to be able to live, such as water, food, shelter, and clothing.

Want

Any good or service which people would like to have that is not essential for living, such as mobile phones, cars, and holidays.

Scarcity

The basic economic problem resulting from consumers having unlimited needs and wants while businesses have limited factors of production.

Opportunity Cost

The next best alternative given up when a choice is made between competing uses of scarce resources.

Land

A factor of production comprising all natural resources such as minerals, ores, fields, oil, and forests.

Capital

A factor of production comprising the machinery, equipment, and finance needed to produce goods and services.

Labour

A factor of production referring to the number of people available to work.

Enterprise

A factor of production involving people (entrepreneurs) who are prepared to take the risk of setting up businesses.

Specialisation

When a business person or worker focuses on performing what they are good at.

Division of Labour

The process of splitting up production tasks and having each worker perform that specific task.

Consumer Goods

Physical or tangible products sold to the public that can be seen and touched.

Durable Consumer Goods

Physical products sold to the public that can be used over and over again, such as televisions, computers, cars, tables, and chairs.

Non-durable Consumer Goods

Physical goods sold to the public that can only be used once, such as food and drink.

Consumer Services

Intangible products sold to the public that cannot be seen or touched, such as insurance, banking, and bus journeys.

Capital Goods

Physical products sold to other businesses to assist them in their production process, such as machines, computers, and delivery vehicles.

Added Value

The increased worth achieved by taking raw materials and transforming them into finished goods and services through branding, excellent service quality, added product features, or convenience.

Sole Trader

A business in which one person provides the permanent finance, maintains full control, keeps all the profits, and carries unlimited liability.

Partnership

A business formed by two or more people with shared capital investment, shared responsibilities, and unlimited liability, where any partner's decision is legally binding on all.

Unlimited Liability

A legal condition where the business is not a separate legal entity, making the owners personally liable for all business debts.

Private Limited Company (Ltd)

An incorporated business that provides limited liability and continuity, with shares typically owned by the founder, relatives, friends, and employees, without permission to sell shares to the general public.

Public Limited Company (plc)

An incorporated business owned by shareholders with limited liability that has the right to advertise its shares for sale to the general public and have them quoted on the stock exchange.

Franchise

A business agreement where a franchisor enables a franchisee to sell goods or services using its tried and tested idea and brand under strict contractual terms.

Cooperative

A jointly owned business operated by members for their mutual benefit to produce or distribute goods or services, such as consumers' or farmers' cooperatives.

Social Enterprise

A business with primarily social objectives that reinvests most of its profits into benefiting society rather than maximising financial returns to owners.

Charity

An organisation that raises money for good causes and draws attention to the needs of disadvantaged groups in society, relying on donations for revenue.

Multinational Enterprise (MNE)

Any business that carries out productive activities in two or more countries.

Public Sector

Organisations that are accountable to and controlled by central or local government (the state).

Private Sector

Businesses owned and controlled by individuals or groups of private individuals.

Public Goods

Goods provided by the state that are non-excludable (one consumer cannot stop another from using them), non-rival (one person's consumption does not reduce availability for others), and non-rejectable (cannot be avoided).

Primary Sector

Business activity that extracts natural resources directly from the earth, such as farming, fishing, and mining.

Secondary Sector

Business activity that manufactures, processes, and turns raw materials into finished or semi-finished goods.

Tertiary Sector

Business activity focused on providing commercial and personal services to consumers and other businesses.

Industrialisation

An economic transition characterized by the growing importance of secondary sector activity and the declining importance of primary sector activity.

De-industrialisation

An economic transition where the importance of the tertiary sector increases while the secondary sector declines.

Mixed Economy

An economic system combining a private sector and a public sector, where decisions regarding what, how, and for whom to produce are shared.

Quantitative Location Factors

Measurable, financially quantifiable factors considered when selecting a site, including cost of site, labour costs, transport costs, market potential, and government incentives.

Qualitative Location Factors

Non-financial, descriptive factors influencing location choice, such as site size for expansion, legal restrictions, quality of local infrastructure, and ethical concerns.

Government Incentives (Location)

Financial and supportive packages provided by national or local governments to persuade businesses to locate in specific regions, reducing initial setup costs.

Infrastructure (Location Factor)

The local transportation links (road, rail, air, sea) and utility support systems (water, power, telecommunications) available at a potential business site.