year 10 vocab

• needs

  items that are essential for survival, such as water, food, shelter and clothing
• wants

  items that are desired and often make life more enjoyable - not essentials
• the economic problem

  needs and wants are unlimited, but resources are limited, this creates scarcity
• factors of production

  the resources combined to make goods and services. it enduces land, labour, capital and enterprise. they are in limited supply
• scarcity


  the lack of or limited availability of resources to fulfil the total wants of the population
• opportunity cost

  an alternative lost when a desicion is made
• specialisation


  the process where a business focuses on a particular industry or segment of a market
• division of labour

  when employees concentrate on a part of the manufacturing process and become highly skilled, resulting in greater efficiency on individual tasks
• businesses


  Combine factors of production to make products (goods and services) which satisfy people's wants.
• added value


  the difference between the selling price of a product and the cost of bought-in materials and components
• economy

  an economy is a system that organises the money, industry, and trade of a country or region
• primary sector

  the removal of natural materials from the land to gather the raw materials or food needed for the production process carried out by other businesses
• secondary sector

  the process of combining the raw materials extracted from the primary sector resulting in finished goods
• teritary sector

  provides services to customers and the other sectors of industry
• deindustrialization


  occurs when there is a decline in the importance of the secondary, manufacturing sector of industry in a country
• mixed economy

  compromised activity from both the private and public sectors
• capital

  the money invested into a business by the owner
• less developed countries

  less economically developed countries with the majority of economic activity in the primary sector. access to basic needs such as clean water and food is in short supply
• demand


  the quantity of goods or services that a consumer is willing and able to buy at a given price
• developed economy

  a developed economy is one where there is sustained economic growth and long-term economic stability
• developing economy

  a developing economy is seen to be in a transition period moving away from a reliance on primary sector activities to more manufacturing and production in the secondary sector
• private sector

  all business organisations that are owned and operated by individuals or groups with no government involvement
• public sector

  all business organisations that are owned and operated by the government
• entrepraneur

  a person who organises, operates and takes the risk for a new business venture
• business plan


  a document containing the business objectives and important details about the operations, finance and owners of a new business
• capital employed

  the total value of capital used in the business
• internal growth

  expansion of existing operations within the current business
• external growth

  expension achieved by taking over or merging with another business
• Takeover or acquisition


  one business purchases another by buying 51% or more of a businesses shares
• merger

  owners of two businesses agree to combine their businesses, forming a new, single entity/business
• Horisontal integration

  merging with or taking over another business in the same industry and at the same stage of production
• vertical integration

  merging or taking over another business in the same industry but at a different stage of production. this can either be forwards of backwards integration
• conglomerate integration

  when one business merges with or takes over a business in a completely different industry. this is also known as diversification
• sole trader

  a business that is owned and operated by one person
• Unlimted liability


  where the owner of the business is responsible for all of the businesses' debts. their liability is not limited to the investments they made in the business
• limited liabilty

  when a business goes into debt, owners will only lose the amount they invested and not have to sell their personal belongings to settle those debts
• partnership

  a business that is owned and operated by two or more people
• a partnership agreement

  the written and legal agreement between business partners. it is not esential for partners to have such an agreement but it is always recomended
• unincorporated business

  no seperation between the company and the owners in law
• incorporated business

  companies that have seperate legal status from their owners