Definitions (Past Papers 2016 to 2022)

1. ‘Economy is in recession’ - It is when there is a falling GDP (Gross Domestic Product) in an economy.
2. Non-current asset - It refers to the items owned by the business for more than one year.
3. Quality assurance - It is the checking for the quality standards of a product or service throughout the
production process by employees.
4. Market-oriented - A market oriented business is one which carries out market research to find out.
consumer wants before a product is developed and produced.
5. Price elastic - Price elastic demand is where consumers are very sensitive to the changes in price of
a product.
6. Trade union - A trade union is a group of employees who have joined together to ensure their
interests are protected.
7. Marketing budget - Marketing budget is a financial plan for the marketing of a product or product
range for a specified period of time.
8. Non-current liabilities - Non-current liabilities are the long term debts owed by the business, repaid
over more than one year.
9. Import tariff - It is a tax on an imported product.
10. Opportunity cost - Opportunity cost is the next best alternative given up by choosing another item.
11. Marketing strategy - Marketing strategy is a plan to combine the right combination of four elements
of the marketing mix for a product or service to achieve a particular marketing objective(s).
12. Penetration pricing - Penetration pricing is when the price is set lower than the competitor’s prices
in order to be able to enter a new market.
13. Job production - Job production is where a single product is made at a time.
14. Quality control - Quality control is the checking for the quality of a product at the end of the
production process by using quality inspectors.
15. Batch production - Batch production is where a quantity of one product is made, then a quantity of
another item will be produced.
16. Business plan - Business plan is a document containing the business objectives and important details
about the operations, finance and owners of the new business.
17. Market research - Market research is a process of gathering, analyzing and interpreting information
about a market.
18. Liquidity - Liquidity is the ability of a business to pay back its short term debts.
19. Economic boom – Strong rise in level of economic activity OR Period of time when GDP rising rapidly
20. Stakeholder group - A stakeholder is any person or group with a direct interest in the performance
and activities of a business.
21. Private sector - Private sector includes businesses not owned by the government. They will make
their own decisions about what to produce, how to produce it and what price to charge for it.
22. Tertiary sector - The tertiary sector of industry provides services to the consumers and the other
sectors of industry.
23. External cost - External costs are the costs paid for by the rest of society other than the business as a
result business activity.
24. Non – current assets - Non-current assets are the items owned by the business for more than one
year.
25. Motivation - Motivation is the reason why the employees want to work hard and work efficiently for
the business.
26. Price elastic demand - Price elastic demand is when the consumers are very sensitive to changes in
the price of a product.
27. On –the – job training - On the job training occurs by watching a more experienced worker doing the
job.
28. Mass market - Mass market is where there is a very large number of sales of a product.
29. Stakeholder group - A stakeholder is any person or group with a direct interest in the performance
and activities of a business.
30. Cash flow forecast - A cash flow forecast is an estimate of future cash inflows and outflows of a
business, usually on a month by month basis. It then shows the expected cash balance at the end of
each month.
31. Added value - Added value is the difference between the selling price of a product and the cost of
bought in materials and components.
32. Micro – finance - Micro-finance is providing financial services - including small loans - to poor people
not served by traditional banks.
33. Social enterprise - A social enterprise is operated by private individuals and has social objectives as
well as an aim to make a profit to reinvest back into the business.
34. Limited company - Limited company is an incorporated business and has limited liability.
35. Niche market - A niche market is a small, usually specialized, segment of a much larger market.
36. Redundancy - Redundancy is when an employee is no longer needed and so loses their job. It is not
due to any aspect of their work being unsatisfactory.
37. Variable cost - Variable costs are costs which vary directly with the number of items sold or
produced.
38. Chain of command - Chain of command is the structure of an organization which allows instructions
to be passed down from senior management to lower levels of management.
39. Social enterprise - A social enterprise is operated by private individuals and has social objectives as
well as an aim to make a profit to reinvest back to the business.
40. Fixed costs - Fixed costs are costs which do not vary in the short run with the number of items sold
or produced.
41. Mass market - Mass market is where there is a very large number of sales of a product.
42. Job enrichment - Job enrichment involves looking at jobs and adding tasks that require more skill
and/or responsibility.
43. Gross domestic product - Gross Domestic Product (GDP) is the total value of output of goods and
services in a country in one year.
44. Autocratic leadership - Autocratic leadership is where the manager expects to be in charge of the
business and have their orders followed.
45. Public corporation - A public corporation is a business in a public sector that is owned and controlled
by the government.
46. Franchise - A franchise is a business based upon the use of band names, promotional logos and
trading methods of an existing successful business. A franchisee buys the license to operate this
business from the franchisor.
47. Induction training - Induction training is an introduction given to a new employee, explaining the
business’s activities, customs and procedures and introducing them to their fellow workers.
48. Exchange rate - Exchange rate is the price of one currency in terms of another currency.
49. Capital employed - Capital employed is the total value of capital used in the business.
50. Dismissal - Dismissal is when an employment is ended against the will of the employee, usually for
not working in accordance with the employment contract.
51. Economies of scale - Economies of scale are the factors that lead to a reduction in average costs as a
business increases in size.
52. Globalization - Globalization is the term used to describe increases in worldwide trade and
movement of people and capital between countries.
53. Market research - It is the process of gathering, analyzing and interpreting information about a
market.
54. Specialization - Specialization occurs when people and businesses concentrate on what they are best
at.
55. Trade union - Trade union is a group of employees who have joined together to ensure their
interests are protected.
56. Business plan - A business plan is a document containing business objectives and important details
about the operations, finance and owners of the new business.
57. Profit - Profit is the amount of money a business made after deducting the costs from revenue.
58. Pressure group - Pressure groups are groups of people who act together to try to force businesses
or governments to adopt certain policies.
59. Brand image - Brand image is an image or identity given to a product which makes it a personality of
its own and distinguished it from its competitors’ products.
60. Microfinance - Microfinance is providing financial services - including small loans - to poor people
not served by traditional banks.
61. Break-even – Break-even point is the level of sales at which total costs equal total revenue.
62. Return on capital employed - (Net Profit/Capital Employed) * 100
63. Limited liability - Limited liability means that the liability of the shareholders in a company is limited
to only the amount they invested.
64. Niche market - A niche market is a small, usually specialized, segment of a much larger market.
65. Market segmentation - Market segmentation is when a market is broken down into sub-groups,
which share similar characteristics.
66. Batch production - Batch production is where a quantity of one product is made, then a quantity of
another item will be produced.
67. Cost – plus pricing - Cost-plus pricing is the cost of manufacturing the product plus a profit mark-up.
68. Marketing mix - Marketing mix is a term used to describe all the activities that go into marketing
a product or service.
69. Opening balance - Opening balance is the amount of cash held by the business at the start of the
month.
70. Fixed cost - Fixed costs are costs that do not vary in the short run with the number of items sold or
produced.
71. Primary sector - The primary sector of industry extracts and uses natural resources of Earth to
produce raw materials used by other businesses.
72. Secondary sector - The secondary sector of industry manufactures goods using the raw materials
provided by the primary sector.
73. Variable costs - Variable costs are costs that vary directly with the number of items sold or
produced.
74. ‘depreciation of an exchange rate’- Depreciation of an exchange rate is when the exchange rate is
worth less against other currencies.
75. Total cost - Total costs are fixed and variable costs combined.
76. Delegation - Delegation means giving a subordinate the authority to perform particular tasks.
77. Current liabilities – (short-term) debts owed by a business, to be repaid in less than one year
78. Off-the-job training – Training that takes place away from the workplace usually by a specialist
trainer(s).
79. Entrepreneur – A person who takes the risk for a new business venture.
80. Opportunity cost – The next best alternative given up by choosing another item.