IB BUSINESS AND MANAGEMENT SL FULL
REVISION COMPLETE STUDY GUIDE
PRACTICE QUESTIONS AND NOTES
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Factors of Production The inputs (or resources) necessary for the production process: land, labor,
capital, and enterprise (aka entrepreneurship).
Functional Areas Refer to the different sections of a business, i.e. marketing, production, finance,
and human resource departments.
Labor The physical and mental human effort used in the production process.
Land 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 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 The businesses involved in the cultivation or extraction of natural resources, such
as farming, mining, quarrying, fishing, oil exploration, and forestry.
Secondary Sector 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 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 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 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 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 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 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 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 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 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) 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 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 a business organization owned by shareholders with limited liability but whose
shares cannot be bought by or sold to the general public
private sector 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 an incorporated business organization that allows the general public to buy and
sell shares in the company via a stock exchange
public corporations 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 the part of the economy controlled by the government, e.g. state health and
education services, emergency services, and national defense
Stock Exchange 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)
REVISION COMPLETE STUDY GUIDE
PRACTICE QUESTIONS AND NOTES
| GRADED A+ | GUARANTEED SUCCESS
Updated 2026 Questions and Answers
100% Verified Exam Prep and Comprehensive
Rationales Included
,Factors of Production The inputs (or resources) necessary for the production process: land, labor,
capital, and enterprise (aka entrepreneurship).
Functional Areas Refer to the different sections of a business, i.e. marketing, production, finance,
and human resource departments.
Labor The physical and mental human effort used in the production process.
Land 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 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 The businesses involved in the cultivation or extraction of natural resources, such
as farming, mining, quarrying, fishing, oil exploration, and forestry.
Secondary Sector 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 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 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 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 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 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 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 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 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 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) 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 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 a business organization owned by shareholders with limited liability but whose
shares cannot be bought by or sold to the general public
private sector 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 an incorporated business organization that allows the general public to buy and
sell shares in the company via a stock exchange
public corporations 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 the part of the economy controlled by the government, e.g. state health and
education services, emergency services, and national defense
Stock Exchange 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)
