Business Studies Yr 9 intro

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Description and Tags

This is for O level/IGCSE Business Studies

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17 Terms

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cause of the economic problem

unlimited wants + limited resources = scarcity

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opportunity cost

next best alternative forgone

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advantages of division of labour

workers are trained in one task and therefore are more skilled, less time is wasted and training is cheaper

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disadvantages of division of labour

  • the absence of workers may lead to production delays

  • workers can be bored and it leads to drops in productivity due to job dissatisfaction

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business activity

Combining limited resources to produce goods and services while employing labor.

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added value

selling price - cost price

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how to increase added value

reduce costs or increase price

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primary sector

extraction and production of natural resources

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secondary sector

the secondary sector involves the manufacturing and industrial processes that transform raw materials obtained from the primary sector into finished goods

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tertiary sector

The tertiary sector is the segment of the economy that provides services rather than goods. e.g.:

-retail

-wholesale

-transportation

-hospitality

-healthcare

-finance

-education

-entertainment

-etc.

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relative importance of economic sectors

percentage of the countries total workers in each sector / value of output of each sector as a percentage of the countries total output

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benefits of being an entrepreneur

larger profits compared to working as an employee, personal fame and recognition, independence and ability to use own skills

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disadvantages of being an entrepreneur

risk, lack of capital and knowledge and opportunity cost of being an employee

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characteristics of successful entrepreneurs

hard working, risk taking, creative, optimistic, confident, innovative, independent and effective communicator

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business plan

a written document that provides a description and overview of your companies future

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contents of a business plan

description of business and product/service, target market, business location, management, financial information, cashflow forecast, business strategy, etc.

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use of a business plan

helps gain capital and reduces risk through careful planning