Business Studies Lecture Notes

Flashcards created to aid in the revision of key business studies concepts.

Scarcity

The lack of sufficient products to fulfill the total wants of the population.

Opportunity Cost

The next best alternative that is given up when making a choice.

Factors of Production

Resources needed to produce goods and services: Land, Labour, Capital, and Enterprise.

Specialisation

When individuals or businesses focus on what they are best at to increase productivity.

Added Value

The difference between the cost of purchasing raw materials and the selling price of finished goods.

Primary Sector

The sector of the economy that extracts and uses the earth's natural resources.

Secondary Sector

The sector that manufactures goods using raw materials from the primary sector.

Tertiary Sector

The sector that provides services to consumers and businesses.

Mixed Economy

An economy that has both public and private sectors.

Privatisation

The process of selling a public sector business to the private sector.

Entrepreneur

A person who organizes, operates, and takes risks to run a business.

Business Plan

A document that contains the business objectives and essential details about operations, finance, and ownership.

Franchise

An agreement where one business allows another to operate using its brand name and business model.

Joint Venture

When two or more businesses come together to create a new business.

Public Corporation

A business owned and controlled by the state or government.

Balance of Payments

A record of all financial transactions made between entities in one country and the rest of the world.

Exchange Rate

The price of one currency in terms of another currency.

Market Segmentation

The process of dividing a market into distinct groups of buyers with different needs or behaviors.

Break-even Point

The level of sales at which total revenues equal total costs.

Total Quality Management (TQM)

A management approach focused on quality in all aspects of an organization.

Lean Production

Production methods aimed at reducing waste and increasing efficiency.

Cash Flow

The total amount of money being transferred in and out of a business.

Income Statement

A financial statement that shows a company's revenues and expenses during a specific period.

Statement of Financial Position

A financial statement that shows the company’s assets, liabilities, and equity at a specific point in time.