1750-1900, increased use of machines and mass production of goods
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Customers
The people who ^^buy^^ a business’s goods or services
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Demand
The quantity of goods or services that a consumer is ^^willing and able to buy^^ at a given price
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Need
Items that are ^^essential for surviva^^l (Food, water, warmth, shelter)
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Want
Items that are ^^desired^^ and often ^^make life more enjoyable^^ but ^^aren’t essential to survival^^
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Resources
^^Physical items or labour^^ (provided by employees) used to ^^produce goods and services^^
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Factors of Production
The resources combined to make goods and services (^^land, labor, capital and enterprise^^)
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Consumers
The person who ^^uses^^ a business’s goods or services
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Added value
The amount ^^put onto the cost^^ of the ^^materials/components^^ to make a product or service => creating the ^^selling price^^
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Profits
The ^^money^^ a business has ^^after all costs have been covered^^ (sales revenue - total costs = profit)
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Basic Economic Problem
Needs and wants are ^^unlimited^^, but the resources required to satisfy these are ^^limited^^
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Scarcity
The ^^lack of or limited availability^^ of resources
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Renewable
A resource that ^^can be used again and again^^ without ever running out
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Opportunity cost
An ^^alternative lost^^ when a decision is made
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Efficient
When a business ^^increases its output^^ by ^^reducing the level of wasted resources^^ it uses to produce them
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Specialisation
The process where a business focuses on a ^^particular industry or segment of a market^^
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Division of labour
When employees ^^concentrate on a part of the manufacturing process^^ and become highly skilled => greater efficiency on individual tasks
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Efficiency
The ability to ^^avoid wasting material, energy, effort and time^^ while producing something
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Motivation
Factor that ^^influence and encourage the behaviours required of employees^^ to meet ^^business goals^^ efficiently
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Economy
A system that organises the money, industry and trade of a country or region
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Extraction
The ^^mining of any valuable materials and minerals^^ from the Earth
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Production
The process of ^^making or manufacturing a product^^ from ^^components or raw materials^^
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Primary Sector
The removal of natural materials from the land to gather the ^^raw material or food^^ needed for the ^^production process carried out by other businesses^^
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Secondary Sector
The process of ^^combining the raw materials^^ extracted from the primary sector ^^resulting in finished goods^^
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Tertiary Sector
Offers ^^services^^ to other businesses and consumers in the economy
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Channels of distribution
The ^^route^^ through which a product travels between the ^^manufacturer and the final consumer^^
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Deindustrialisation
The ^^reduction^^ in the ^^level of production and manufacturing of goods^^ in a particular economic region or economy
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Mixed economies
Comprises of activity from both the ^^private and public sectors^^
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Private Sector
All business organisations that are ^^owned and operated by individuals^^ or groups, with ^^no government involvement^^
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Public Sector
All business organisations that are ^^owned and operated by the government^^
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Revenue
The ^^money^^ gained by a business through the ^^sales of goods or services^^ (Price x Quantity sold = revenue)
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Entrepreneur
A person who ^^starts a business^^, usually because they have an ^^idea for a new product^^ or because they’ve found a way to meet other needs of customers that have not been previously met
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Business Plan
A ^^report^^ that outlines the ^^objectives of a business^^ and how the business ^^plans to achieve them^^
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Bankruptcy
When a business can ^^no longer pay its debts^^ and the ^^bank^^ ^^takes its assets^^, like property, to recover some of all of what is owed
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Stakeholder
Anyone with an ^^interest in a business and its activities^^
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Cash flow
The ^^movement of cash^^ (working capital) ^^into and out of the business^^
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Assets
^^Anything that is owned by a person or a business^^
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Shareholders
A person who ^^owns shares in a limited company^^, making them one of the ^^business’s owners^^
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Market share
The ^^sales of a business’s products^^ as a ^^percentage of the total sales of all businesses in the same market^^
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Economies of scale
The ^^reduction of average costs^^ as a result of a ^^businesses growth in size^^
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Social enterprise
A business which has a ^^social objective^^ as well as an aim ^^to make profit^^
Studied by 4 people
