1
Water, Shelter, Food, Clothing
What is a need?
Land / Labour / Capital / Entrepreneurship
What are the factors of production?
The next best alternative forgone
What is opportunity cost?
Instead of everyone doing every job, the tasks are divided among people who are skilled and efficient at them.
What is specialization?
Price Sold - Cost
What is added value?
Organizations owned by local government
What is the public sector?
Businesses owned by private individuals
What is the private sector?
this involves the use/extraction of natural resources
What is the primary sector?
this involves the manufacture of goods using the resources from the primary sector
What is the secondary sector?
this consist of all the services provided in an economy
What is the tertiary sector?
A company owned by at least 2 shareholders where shares can be sold to the general public
What is a public limited company?
A company owned by at least 2 shareholders where shares can only be sold to family and friends
What is a private limited company?
You must pay off your debts using your own money
What is unlimited liability?
an agreement between two or more businesses to work together on a project.
What is a joint venture?
The owner of a business grants a license to another person or business to use their business idea
What are franchises?
A person who organizes, operates and takes risks for a new business venture
What is an entrepreneur?
A document containing the business objectives and important details about the operations, finance and owners of the new business
What is a business plan?
This occurs when a business expands its existing operations.
What is internal growth?
This is when one firm merges with or takes over another one in the same industry at the same stage of production.
What is horizontal integration?
When one firm merges with or takes over another firm in the same industry but a stage of production that is behind the “predator” firm
What is backward vertical integration?
When one firm merges with or takes over another firm in the same industry but a stage of production that is ahead of the “predator” firm.
What is forward vertical integration?
This is when one firm merges with or takes over a firm in a completely different industry
What is conglomerate integration?
Difficult to control staff / Lack of funds / Lack of expertise
What are problems of growth?
Any person or group that is interested in or directly affected by the performance or activities of a business
What is a stakeholder?
Survival / Profit / Market Share
What are business objectives?