Business Activity Fundamentals

Scarcity refers to the lack of sufficient products to fulfill the total wants of the population. It is significant because it necessitates choices and prioritization in the allocation of limited resources.

Opportunity cost is the next best alternative given up when choosing one option over another. It impacts decision-making by highlighting the potential benefits that are sacrificed to pursue a chosen action.

The primary sector extracts natural resources, the secondary sector manufactures goods from these resources, and the tertiary sector provides services. Together, they comprise the major divisions of economic activity.

<p>Specialization occurs when individuals or businesses focus on their best strengths or resources to increase efficiency and productivity. It often leads to greater expertise and higher quality outputs.</p> Signup and view all the answers

<p>Internal growth is the expansion of a business's existing operations, while external growth occurs through mergers or takeovers of other businesses. Both strategies aim to increase a company's size and market presence.</p> Signup and view all the answers

<p>The four factors of production are land, labor, capital, and entrepreneurship. They are important because they are the essential resources needed to produce goods and services.</p> Signup and view all the answers

<p>Added value is the difference between the selling price and the cost of bought-in materials and components. Businesses achieve it by enhancing products through branding, features, and improved services.</p> Signup and view all the answers

<p>De-industrialisation occurs when the secondary manufacturing sector declines, which can lead to job losses and a shift towards a service-oriented economy. It can impact economic stability and growth negatively.</p> Signup and view all the answers

<p>A merger involves two businesses agreeing to join together, while an acquisition occurs when one business buys out another.</p> Signup and view all the answers

<p>Horizontal integration is when one business merges with or takes over another in the same industry at the same stage of production.</p> Signup and view all the answers

<p>Vertical integration involves merging with or acquiring a business at a different stage of production, whereas horizontal integration is at the same stage.</p> Signup and view all the answers

<p>Limited liability means that shareholders' responsibility for a company's debts is limited to the amount they invested.</p> Signup and view all the answers

<p>Shareholders own the company by purchasing shares, representing part-ownership and participation in profits.</p> Signup and view all the answers

<p>Dividends are payments made to shareholders from a company's profits after tax.</p> Signup and view all the answers

<p>A public limited company can sell shares to the public and its shares are traded on the Stock Exchange.</p> Signup and view all the answers

<p>Current liabilities are short-term debts repaid in less than one year, while non-current liabilities are long-term debts repaid over more than one year.</p> Signup and view all the answers

<p>Liquidity refers to a business's ability to pay back its short-term debts.</p> Signup and view all the answers

<p>A franchise is a business that operates under the brand name and business model of an existing successful business.</p> Signup and view all the answers

<p>Job rotation involves employees switching tasks regularly to enhance variety and reduce monotony.</p> Signup and view all the answers

<p>Economic growth occurs when a country's GDP increases, indicating more goods and services produced than in the previous year.</p> Signup and view all the answers

<p>Real income falls when prices rise faster than money income.</p> Signup and view all the answers

<p>Organisational structure denotes the arrangement of management levels and responsibilities within an organisation.</p> Signup and view all the answers

<p>Autocratic leadership involves making decisions unilaterally, while democratic leadership encourages employee participation in decision-making.</p> Signup and view all the answers

<p>Exchange rate depreciation decreases the value of a currency, making imports more expensive and exports cheaper.</p> Signup and view all the answers

<p>Fiscal policy involves government changes in tax rates or public sector spending to influence economic activity.</p> Signup and view all the answers

<p>A joint venture allows two or more businesses to collaborate on a project, sharing resources, risks, and profits.</p> Signup and view all the answers

<p>A multinational business operates factories, production, or service facilities in more than one country.</p> Signup and view all the answers

<p>A stakeholder is any individual or group with a direct interest in a business's performance and activities.</p> Signup and view all the answers

<p>The chain of command is the structure that allows instructions to flow from senior management to lower levels of management.</p> Signup and view all the answers

<p>Private costs are incurred by a business or consumer, while external costs are borne by society due to business activities.</p> Signup and view all the answers

<p>An import tariff is a tax placed on imported goods to protect domestic industries.</p> Signup and view all the answers

<p>Sustainable development meets present needs without compromising the ability of future generations to meet their own needs.</p> Signup and view all the answers

<p>To identify and record the responsibilities and tasks related to a job.</p> Signup and view all the answers

<p>Internal recruitment fills a vacancy with an existing employee, while external recruitment hires someone new to the business.</p> Signup and view all the answers

<p>Induction training introduces new employees to the business's activities and customs, helping them integrate smoothly.</p> Signup and view all the answers

<p>On-the-job training involves learning in the workplace by observing experienced workers, while off-the-job training occurs away from the workplace.</p> Signup and view all the answers

<p>Workforce planning involves determining the number and skills of employees needed for the future.</p> Signup and view all the answers

<p>Dismissal is ending employment due to unsatisfactory work, while redundancy is when the employee is no longer needed, regardless of performance.</p> Signup and view all the answers

<p>Feedback indicates whether a message has been understood and can prompt necessary actions.</p> Signup and view all the answers

<p>A marketing budget is a financial plan detailing the amount available for marketing activities over a specific period.</p> Signup and view all the answers

<p>Primary research is the collection of original data through direct contact with customers, such as surveys or interviews.</p> Signup and view all the answers

<p>The four Ps are product, price, place, and promotion.</p> Signup and view all the answers

<p>Market segmentation involves dividing a market into identifiable sub-groups with similar characteristics or preferences.</p> Signup and view all the answers

<p>A USP differentiates a product from competitors by highlighting its distinct features.</p> Signup and view all the answers

<p>Brand loyalty leads consumers to repeatedly buy the same brand instead of switching to competitors.</p> Signup and view all the answers

<p>Packaging serves as a physical container for a product and promotes its appeal to customers.</p> Signup and view all the answers

<p>Internal finance is obtained from within the business, while external finance comes from outside sources.</p> Signup and view all the answers

<p>Micro-finance provides financial services, including small loans, to poor individuals who are typically not served by traditional banks.</p> Signup and view all the answers

<p>Crowdfunding involves raising money for a project or venture from a large number of people, each contributing a small amount, often via the internet.</p> Signup and view all the answers

<p>Net cash flow is the difference between cash inflows and cash outflows for a given period.</p> Signup and view all the answers

<p>Retained profit is the net profit reinvested back into the company after paying taxes and dividends to owners.</p> Signup and view all the answers

<p>An income statement records a business's income and all costs incurred to earn that income over a specific period, indicating profitability.</p> Signup and view all the answers

<p>Gross profit is calculated by subtracting the cost of sales from revenue.</p> Signup and view all the answers

<p>The statement of financial position shows the value of a business's assets and liabilities at a specific point in time.</p> Signup and view all the answers

<p>Introduction, growth, maturity, and decline.</p> Signup and view all the answers

<p>To maintain a product in the maturity stage of its life cycle for a longer period.</p> Signup and view all the answers

<p>It is calculated as the production cost plus a profit margin.</p> Signup and view all the answers

<p>It involves pricing a product in line with or just below competitors to attract more customers.</p> Signup and view all the answers

<p>Setting a price lower than competitors to enter a new market.</p> Signup and view all the answers

<p>It involves setting a high price for a new product to maximize revenue from early adopters.</p> Signup and view all the answers

<p>Selling a product at a very low price for a limited time to boost sales.</p> Signup and view all the answers

<p>A strategy where prices are adjusted based on real-time demand conditions.</p> Signup and view all the answers

<p>Price elastic demand is sensitive to price changes, while price inelastic demand is not.</p> Signup and view all the answers

<p>They are the means by which products are delivered from producers to consumers.</p> Signup and view all the answers

<p>An independent entity appointed to handle sales and distribution of products.</p> Signup and view all the answers

<p>To raise awareness of a product, boost sales, and foster brand loyalty.</p> Signup and view all the answers

<p>It involves sharing content to engage an audience and achieve marketing goals.</p> Signup and view all the answers

<p>The finance needed for a business's day-to-day operations.</p> Signup and view all the answers