Cambridge IGCSE Business Studies - Section 1 Vocabulary

Vocabulary flashcards covering key business terms, economic concepts, classification of sectors, enterprise, and sole traders from Section 1 of Cambridge IGCSE Business Studies.

Business activity

The process of producing goods and services to satisfy consumer demand.

Need

A good or service which is essential to living.

Want

A good or service which people would like, but is not essential for living.

Economic problem

Unlimited wants cannot be met because there are limited factors of production. This creates scarcity.

Factors of production

The resources needed to produce goods and services – land, labour, capital and enterprise.

Scarcity

There are not enough goods and services to meet the wants of the population.

Opportunity cost

The benefit that could have been gained from an alternative use of the same resource.

Specialisation

People and businesses concentrate on what they are best at.

Division of labour

Production is divided into separate tasks and each worker does just one of those tasks.

Consumer goods

Products which are sold to the final consumer. They can be seen and touched, for example computers and food.

Consumer services

Non-tangible products such as insurance services, transport.

Capital goods

Physical goods, such as machinery and delivery vehicles, used by other businesses to help produce other goods and services.

Primary sector

Firms whose business activity involves the extraction of natural resources.

Secondary sector

Firms that process and manufacture goods from natural resources.

Tertiary sector

Firms that supply a service to consumers and other businesses.

Chain of production

The production and supply of goods to the final consumer involves activities from primary, secondary and tertiary sector businesses.

Mixed economy

An economy where the resources are owned and controlled by both the private and public sectors.

Private sector

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

Public sector

The part of the economy that is controlled by the state or government.

Entrepreneur

An individual who has an idea for a business takes the financial risk of starting and managing a new business.

Business plan

A detailed written document outlining the purpose and aims of a business which is often used to persuade lenders or investors to finance a business proposal.

Revenue

The amount a business earns from the sale of its products.

Business start-up

A newly formed business. They usually start small, but some might grow to become much bigger.

Sole trader

A business that is owned and controlled by just one person who takes all of the risks and receives all of the profits.

Start-up capital

The finance needed when first setting up a business.