Paper 1

• Sector


  A part of the economy that provides specific goods or ervices e.g. Education
• Primary sector


  Raw materials or natural resources e.g. Oil
• Secondary sector


  Manufactured goods - things that are made e.g Shoes
• Tertiary sector


  Services that are offered e.g Haircuts
• Factors of Production


  What is needed to produce products and services
• Factors of Production - Land

  All natural resources, renewable and non-renewable. e.g. Coal, wood, animals, mines, as well as actual land space
• Factors of Production - Labour


  Work done by people to produce goods and services
• Factors of Production - Capital

  Things that enable production. e.g. Factories, machines and schools
• Factors of Production - Enterprise

  Entrepreneurs who take risks to produce things using the other factors of production
• Opportunity Cost


  The benefit of a course of action which is lost when you decide to do something else
• Objectives


  The specific goals set by a business to reach its aims
• Characteristics of an Entrepreneur

  Motivated, willing to take risks, organised and innovative
• Objectives of an Entrepreneur

  Financial reward, independence, to fulfill a need for goods or services or have an interest in the area of business
• The Business Environment


  All the factors, both internal and external that effect a business
• Raw Materials


  Unprocessed resources from land
• Specialisation


  Concentrating on providing one good or service
• Resources


  Things that are used to produce goods and services
• Business


  Provides goods or services to customers
• Enterprise


  A business or the motivation to start one
• Entrepreneur


  A person who sets up a business and takes on the risk
• Goods


  Physical product given to customers in exchange for payment
• Services


  Doing something for a customer in exchange for payment
• Customer


  A person who buys goods or services
• Consumer


  A person who uses goods and services
• Cash


  Money in its physical form
• Assets


  Things that a business owns
• Profit


  Total revenue minus total costs = positive amount
• Loss


  Total revenue minus total costs = negative amount
• Accounts


  The records of the financial activity of a business
• Investment


  Putting money into a business
• Debt


  Money that a business owes
• Business plan


  A document outlining how a business is going to start and operate
• Wants


  Things that people would like to have
• Needs


  Things that people must have to live
• Risks


  Dangers or potential losses
• Value


  What something is worth in money
• Legislation


  Laws that are made by governments
• Legal identity


  A company, corporation or other structure that has legal standing, can make contracts, incur debt and assume liabilities.
• Sole Trader


  A person who owns and runs the business, and has legal responsibility for all liabilities of that business
• Private Company


  An incorporated legal structure with a separate legal identity that offers its owners limited liability, whose shares are not available to the public, and has certain legal obligations and rules to follow. Usually small to medium size, or family businesses. Has Ltd. at the end of its name