Unit 5 - Key Words

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Trade-Off
The concept that due to the scarcity of resources, certain decisions have to be made, ranking one resource over others.
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Opportunity Costs
The lost benefits that a person would have got, had they chosen the next best alternative when making a choice.
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Price
Amount of money that a consumer needs to pay in order to buy a product.
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Revenue
Amount of money a business earns. Calculated by doing: Price x Quantity Sold
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Stakeholders
Groups of people who have an interest in how successful a business is.
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Third Party
Person not involved in the decisions of a company.
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Negative Externalities
Costs arising from business activity which is paid by people/organisations outside a firm.
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Positive Externalities
Those benefits received by third parties. The firm gets no payment for these benefits received.
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Profit
Total Costs - Total Revenue.
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Market Share
Quantity sold by a business as a percentage of the sales in a market.
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Social Success
A business's responsibility socially, environmentally and ethically.
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Competitiveness
How well a business is doing in its sector, as measured by market share and profitability.
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Competitive Advantages
Advantages that firms have over rivals.
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Insolvency
When a business is not able to pays its bills over an extended period of time.
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Productivity
Output per worker, or machine, over a period of time.
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Consumer Confidence
A measure of the extent to which consumers are prepared to spend money.
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Inflation
An increase in the General Price Level. Measured by Consumer Price Index (CPI)
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Cost of Living
A measure of the average cost of basic necessities, such as food, housing and clothing.
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External Shock
Unanticipated change in demand or inflation, caused by factors beyond the control of a country.
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Internal Shock
Unanticipated change in demand or inflation, caused by factors within a country.
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Tax Revenue
Money received by Government from people and businesses paying their taxes.
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Level of Demand
Refers to the spending that takes place within an economy.
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Exchange Rates
The price of one currency expressed in terms of another.
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Monetary Policy
Using changes in interest rates to influence economic activity.
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Fiscal Policy
Using taxation and government spending to achieve government objectives.
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Interest Rates
The price paid to borrow money and the reward for saving.
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Unemployment
Exists when people who want to work cannot do so.
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Merger
Where two or more firms agree to join up. This is a voluntary agreement with both firms retaining their identities.
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Takeover
Where one business buys another. To take over a company, it is necessary to gain control by buying enough shares.
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Vertical Backwards Growth
Firm joins with another one at previous stage in production (e.g. supplier).
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Vertical Forwards Growth
Firm joins with one at a later stage in production (e.g. distributor)
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Horizontal Growth
Firm joins with another in the same market.
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Conglomerate Growth
Firms with no common business interest join.
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Economic Growth
Measured by adding up the value of all goods and services produced in the economy in one year. The total is called the GROSS DOMESTIC PRODUCT (GDP).
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Standard of Living
Refers to the amount of goods and services a person can buy with their income in a year. Measured in GDP PER CAPITA (GDP / population).
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Infant Mortality Rates
The % of babies who do not survive past their fifth birthday.
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Life Expectancy Rates
The average age that people are expected to live to from birth.
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Literacy Rates
The % of adults who are able to read and write.
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Sustainable Growth
Where the GDP is increased without imposing negative side effects on future generations.
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Taxes
A way in which the Government funds their spending or changes buying trends, through imposing charges on citizens and businesses.
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Subsidies
A benefit given to groups or individuals, by the government, usually in the form of a cash payment or reduction in tax.
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Legislation
Laws created by the Government or those in power.
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Regulation
Rules or codes of practice set by the Government, which are not made into laws.
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Poverty Line
The extent to which people in a country live in poverty.
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Absolute Poverty
When people are unable to afford the basics of life such as food, shelter and clothes.
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Relative Poverty
When people cannot afford goods or services, including some luxuries, which are considered 'normal' in that country.
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Strengthened Pound
When the pound increases its value against other currencies (i.e. The pound can buy more Euros or fewer pounds are needed to buy €1)
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Weakened Pound
If the pound decreases in value to other currencies (i.e. The pound buys fewer Euros, or more pounds are needed to buy €1)
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Other cards in this set

Card 2

Front

The lost benefits that a person would have got, had they chosen the next best alternative when making a choice.

Back

Opportunity Costs

Card 3

Front

Amount of money that a consumer needs to pay in order to buy a product.

Back

Preview of the back of card 3

Card 4

Front

Amount of money a business earns. Calculated by doing: Price x Quantity Sold

Back

Preview of the back of card 4

Card 5

Front

Groups of people who have an interest in how successful a business is.

Back

Preview of the back of card 5
View more cards

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