CAMBRIDGE IGCSE BUSINESS STUDIES GUIDE 2024 100% SOLVED

A Need - A good or service essential for living. A want - A good or service that people would like to have, but which is not essential for living. Economic problem - Unlimited wants but limited resources - this creates scarcity. Scarcity - Lack of sufficient products to satisfy total wants of population. Opportunity Costs - The next best item given up by choosing another. Factors of production - Resources needed to produce goods and services - land, labour, capital and enterprise Business - An organisation that combines factors of production to make goods and services to satisfy people's wants and needs. Specialisation - People and business concentrate on what they are best at. Division of labour - Production is split into seperate tasks each worker specialises in one task Added Value - The difference between a product's selling price and the cost of bought in materials. Primary sector - Businesses that extract and use natural resources to produce raw materials. Secondary sector - Businesses that manufactures goods using raw materials provided by primary sector. Tertiary sector - Businesses that provide services to consumers and other firms. Deindustrialisation - Decline in the importance of secondary, manufacturing industry. Mixed economy - This has both private sector businesses and public sector businesses. Private sector - Businesses owned by people, not the goverment/state. Public sector - Businesses owned by goverment/state. Privatisation - The sale of public sector business to private sector. Entrepreneur - Someone who organises, operates and takes the risk for a new business venture. Business plan - The objectives and details of the operations, finance and owners of a new business. Capital employed - The total value of capital used in a business. Internal Growth - The business expands its existing operations. External Growth - The business expands by merging with or taking over another business. Takeover - A business buys out the owners of another business. Merger - The owners of businesses agree to join their firms together to form one business. Horizontal integration - The business integrates with another in the same industry at the same stage of production. Vertical integration - The business integrates with another in the same industry but at a different stage of production - towards suppliers is backward vertical integration and towards the market/customer is forward vertical integration.