IB Business and Management Premium
2026–2027 Exam Study Guide: Updated
Questions, Fully Explained Solutions,
Concept Reinforcement & Strategic Revision
Support
Description
The Premium 2026–2027 Exam Study Guide
is a carefully developed resource designed to
support students in achieving stronger exam
performance through structured practice, clear
explanations, and focused revision
techniques.
This guide provides more than just practice
material—it offers a guided learning approach
that helps you understand key concepts, apply
them correctly, and improve your ability to
handle exam questions with confidence. By
combining updated questions with well-
Added Value - ANSWER✅The difference between a product's price and the total cost
of the inputs that went into making it; the extra worth created in the production process.
,Businesses - ANSWER✅Organizations that are involved in the production of goods
and/or the provision of services.
Capital - ANSWER✅All non-natural resources used in the production process;
examples: money, resources (machinery, tools, equipment, factories).
Division of Labor - ANSWER✅The specialization of workers in the provision of goods
and/or services by breaking a job down into particular roles or components that are
repeated by the same workers.
Entrepreneurs - ANSWER✅People who manage, organize, and plan the other three
factors of production; risk takers who exploit business opportunities in return for profits.
Factors of Production - ANSWER✅The inputs (or resources) necessary for the
production process: land, labor, capital, and enterprise (aka entrepreneurship).
Functional Areas - ANSWER✅Refer to the different sections of a business, i.e.
marketing, production, finance, and human resource departments.
Labor - ANSWER✅The physical and mental human effort used in the production
process.
Land - ANSWER✅Natural resources that can be found on the planet, including
renewable and non-renewable natural resources such as water, fish, wood, and
physical land itself.
Opportunity Cost - ANSWER✅The cost measured in terms of the next best alternative
that is foregone when a choice is being made, e.g. money today can be either spent for
immediate benefit or saved for the future.
Primary Sector - ANSWER✅The businesses involved in the cultivation or extraction of
natural resources, such as farming, mining, quarrying, fishing, oil exploration, and
forestry.
Secondary Sector - ANSWER✅The section of the economy where business activity is
concerned with the construction and manufacturing of physical products; automation
and mechanization in modern societies has seen this sector decline in terms of
employment.
Tertiary Sector - ANSWER✅The section of the economy where business activity is
concerned with the provision of services to customers; in modern societies, it is the
largest sector in terms of employment and output.
,Articles of Association - ANSWER✅the document that sets out the internal
organization and rules of a limited company, including the powers of each director and
voting rules; a compulsory document needed to set up a company
Certificate of Incorporation - ANSWER✅the document issued to a limited company to
show that it has been legally formed and is therefore a separate legal entity from its
owners; this certificate allows the company to begin trading shares
charities - ANSWER✅not-for-profit organizations that are established to support good
causes, from society's point of view; examples include the prevention of animal cruelty,
the preservation of the natural environment, or providing assistance to the elderly
company - ANSWER✅a business that is owned by shareholders; it possesses a
certificate of incorporation that gives it a separate legal identity from its owners
Deed of Partnership - ANSWER✅the legal contract signed by the owners of a
partnership; the formal document includes the fundamental issues of the business, such
as the name and responsibilities of each partner and their share of any profits or losses
incorporation - ANSWER✅there is a legal difference between the owners of a
company and the business itself that ensures that the owners are safeguarded against
any losses made by the company as the owners are protected by limited liability
limited Liability - ANSWER✅a restriction on the amount of money that can be lost from
the owners of a business if it goes into bankruptcy; the owners will lose no more than
the amount of capital that they put into the business
Memorandum of Association - ANSWER✅the name of one of the legal documents
required to create an incorporated company; it includes the basic information of the
organization such as the name and address of the company, its objectives, and details
of its share capital
Non-governmental organization (NGO) - ANSWER✅any private sector organization
that does not primarily aim to make a profit; rather, they operate for the benefit of others
in society; examples include World Wildlife Fund and Friends of the Earth
Partnership - ANSWER✅a form of private sector business owned by 2-20 people
(partners) who share the responsibilities and burdens of running and owning the
business
Private Limited Company - ANSWER✅a business organization owned by shareholders
with limited liability but whose shares cannot be bought by or sold to the general public
, private sector - ANSWER✅the part of the economy under the control of private
individuals and businesses, rather than the government, e.g. sole traders, partnerships,
and limited companies
Public Limited Company - ANSWER✅an incorporated business organization that
allows the general public to buy and sell shares in the company via a stock exchange
public corporations - ANSWER✅organizations wholly owned by the government but
run as commercial establishments, e.g. the British Broadcasting Corporation (BBC);
also known as state-owned enterprises
public sector - ANSWER✅the part of the economy controlled by the government, e.g.
state health and education services, emergency services, and national defense
Stock Exchange - ANSWER✅the market place for trading stocks and shares of public
limited companies; examples include the London Stock Exchange (LSE) and the New
York Stock Exchange (NYSE)
silent partner - ANSWER✅an investor of a partnership who is not directly involved in
the daily activities of the business; also known as sleeping partner
sole trader - ANSWER✅a self-employed person who runs the business on their own
and has sole responsibility for its success (profits) or failure (unlimited liability)
unlimited liability - ANSWER✅a feature of sole traders and ordinary partners who are
legally liable for all monies owed to their creditors, even if this means that they have to
sell their personal possessions to pay for this
aims - ANSWER✅the long-term goals of a business, often expressed in the firm's
mission statement; a general statement of a firm's purpose or intentions and tend to be
qualitative in nature
corporate social responsibility (CSR) - ANSWER✅the consideration of ethical and
environmental issues relating to business activity; a CSR allows the business to act
morally towards its various stakeholder groups
ethics - ANSWER✅the moral values that determine and affect business behavior and
decision-making, such as taking actions that are in the best interest of the world's
scarce resources
mission statement - ANSWER✅the declaration of an organization's overall purpose; it
forms the foundation for setting the objectives of a business
2026–2027 Exam Study Guide: Updated
Questions, Fully Explained Solutions,
Concept Reinforcement & Strategic Revision
Support
Description
The Premium 2026–2027 Exam Study Guide
is a carefully developed resource designed to
support students in achieving stronger exam
performance through structured practice, clear
explanations, and focused revision
techniques.
This guide provides more than just practice
material—it offers a guided learning approach
that helps you understand key concepts, apply
them correctly, and improve your ability to
handle exam questions with confidence. By
combining updated questions with well-
Added Value - ANSWER✅The difference between a product's price and the total cost
of the inputs that went into making it; the extra worth created in the production process.
,Businesses - ANSWER✅Organizations that are involved in the production of goods
and/or the provision of services.
Capital - ANSWER✅All non-natural resources used in the production process;
examples: money, resources (machinery, tools, equipment, factories).
Division of Labor - ANSWER✅The specialization of workers in the provision of goods
and/or services by breaking a job down into particular roles or components that are
repeated by the same workers.
Entrepreneurs - ANSWER✅People who manage, organize, and plan the other three
factors of production; risk takers who exploit business opportunities in return for profits.
Factors of Production - ANSWER✅The inputs (or resources) necessary for the
production process: land, labor, capital, and enterprise (aka entrepreneurship).
Functional Areas - ANSWER✅Refer to the different sections of a business, i.e.
marketing, production, finance, and human resource departments.
Labor - ANSWER✅The physical and mental human effort used in the production
process.
Land - ANSWER✅Natural resources that can be found on the planet, including
renewable and non-renewable natural resources such as water, fish, wood, and
physical land itself.
Opportunity Cost - ANSWER✅The cost measured in terms of the next best alternative
that is foregone when a choice is being made, e.g. money today can be either spent for
immediate benefit or saved for the future.
Primary Sector - ANSWER✅The businesses involved in the cultivation or extraction of
natural resources, such as farming, mining, quarrying, fishing, oil exploration, and
forestry.
Secondary Sector - ANSWER✅The section of the economy where business activity is
concerned with the construction and manufacturing of physical products; automation
and mechanization in modern societies has seen this sector decline in terms of
employment.
Tertiary Sector - ANSWER✅The section of the economy where business activity is
concerned with the provision of services to customers; in modern societies, it is the
largest sector in terms of employment and output.
,Articles of Association - ANSWER✅the document that sets out the internal
organization and rules of a limited company, including the powers of each director and
voting rules; a compulsory document needed to set up a company
Certificate of Incorporation - ANSWER✅the document issued to a limited company to
show that it has been legally formed and is therefore a separate legal entity from its
owners; this certificate allows the company to begin trading shares
charities - ANSWER✅not-for-profit organizations that are established to support good
causes, from society's point of view; examples include the prevention of animal cruelty,
the preservation of the natural environment, or providing assistance to the elderly
company - ANSWER✅a business that is owned by shareholders; it possesses a
certificate of incorporation that gives it a separate legal identity from its owners
Deed of Partnership - ANSWER✅the legal contract signed by the owners of a
partnership; the formal document includes the fundamental issues of the business, such
as the name and responsibilities of each partner and their share of any profits or losses
incorporation - ANSWER✅there is a legal difference between the owners of a
company and the business itself that ensures that the owners are safeguarded against
any losses made by the company as the owners are protected by limited liability
limited Liability - ANSWER✅a restriction on the amount of money that can be lost from
the owners of a business if it goes into bankruptcy; the owners will lose no more than
the amount of capital that they put into the business
Memorandum of Association - ANSWER✅the name of one of the legal documents
required to create an incorporated company; it includes the basic information of the
organization such as the name and address of the company, its objectives, and details
of its share capital
Non-governmental organization (NGO) - ANSWER✅any private sector organization
that does not primarily aim to make a profit; rather, they operate for the benefit of others
in society; examples include World Wildlife Fund and Friends of the Earth
Partnership - ANSWER✅a form of private sector business owned by 2-20 people
(partners) who share the responsibilities and burdens of running and owning the
business
Private Limited Company - ANSWER✅a business organization owned by shareholders
with limited liability but whose shares cannot be bought by or sold to the general public
, private sector - ANSWER✅the part of the economy under the control of private
individuals and businesses, rather than the government, e.g. sole traders, partnerships,
and limited companies
Public Limited Company - ANSWER✅an incorporated business organization that
allows the general public to buy and sell shares in the company via a stock exchange
public corporations - ANSWER✅organizations wholly owned by the government but
run as commercial establishments, e.g. the British Broadcasting Corporation (BBC);
also known as state-owned enterprises
public sector - ANSWER✅the part of the economy controlled by the government, e.g.
state health and education services, emergency services, and national defense
Stock Exchange - ANSWER✅the market place for trading stocks and shares of public
limited companies; examples include the London Stock Exchange (LSE) and the New
York Stock Exchange (NYSE)
silent partner - ANSWER✅an investor of a partnership who is not directly involved in
the daily activities of the business; also known as sleeping partner
sole trader - ANSWER✅a self-employed person who runs the business on their own
and has sole responsibility for its success (profits) or failure (unlimited liability)
unlimited liability - ANSWER✅a feature of sole traders and ordinary partners who are
legally liable for all monies owed to their creditors, even if this means that they have to
sell their personal possessions to pay for this
aims - ANSWER✅the long-term goals of a business, often expressed in the firm's
mission statement; a general statement of a firm's purpose or intentions and tend to be
qualitative in nature
corporate social responsibility (CSR) - ANSWER✅the consideration of ethical and
environmental issues relating to business activity; a CSR allows the business to act
morally towards its various stakeholder groups
ethics - ANSWER✅the moral values that determine and affect business behavior and
decision-making, such as taking actions that are in the best interest of the world's
scarce resources
mission statement - ANSWER✅the declaration of an organization's overall purpose; it
forms the foundation for setting the objectives of a business
