| Term | Definition |
|---|
| Marketing services examples | Market Research: Which products customers want, where to locate and what price that will maximise profits |
| Marketing economies | The ability to spread the costs of advertising and other marketing activites over larger output and thus decreasing cost per unit |
| Management economies | The ability to divide the labour force and create specialist positions as the labour force grows. Less mistakes are made now. |
| Merger | When two businesses agree to join their operations and become one single operation |
| Merit goods | Goods that the govt. deems benefical for people to consume |
| Natural resources | Provided by nature; example: rivers, air, trees, climate, seas |
| Non-renewable resources | Natural resources that cannot be replaced in reasonable time frame; example: oil, coal, natural gas |
| Outputs | Goods and services created through the production process |
| Partnership | People combine money and/or skills; Risk responsibility and profits are shared; Specialists can be created/employed; 2-25 owners, unlimited liability |
| Primary sector | Industries concerned with intial use of natural resource, which they extract to produce raw materials |
| Private Sector | Section of the economy not owned by the govt. |
| Producers | Those involved in the output of goods + services |
| Producer Co-Operative | Business owned by the suppliers of the firms raw materials. Eg. Cooperative dairy companies such as Fonterra |
| Production | The process that combines resources (inputs) to make goods and services (outputs) |
| Productivity | Output relative to factor inputs |
| Profit | Excess revenue minus costs; The return to enterprise and risk taking |
| Profit maximisation | The goal of most business firms. Profits can be maximised by increasing revenue and minimising costs |
| Public(collective) goods | Goods and services that are provided by the central/local govt. free of charge and funded from taxation/rates |
| Public sector | Activites that are owned and controlled by govt. |
| Renewable resources | Natural resources that regenerate in a reasonable time frame |
| Revenue | price x quantity sold - how much a firm earns from selling its goods/services |
| Sales maximisations | A major goal of firms - higher market share to gain market power and limit competition |
| Satisficing | Where firms are content with a less than maximum level of achivement |
| Secondary Sector | Industries engaged in processing raw materials into finished (or semi finished) goods. |
| Service industries | Business and firms in the transport, finance, accounting, communication and marketing industries |
| Sole traders | Simplest form of business unit, owned by one person who enjoys all decisions and profits. Unlimited liability |
| Specialisation | Occurs when a worker, firm, region or country concentrates on what they do best. |
| State Owned Enterprise | A business owned by the government e.g. NZ Post, TVNZ |
| Takeover | Where a firm buys a controlling interest in another firm |
| Technology | The type of capital goods availabe to workers and the production process. |
| Tertiary sector | Industries concerned with the provision of services to consumers |
| accounting services examples | Profit (revenue-expenses) Financial stability - can the business pay its debt? Tax income and GST |
| capital intensive | Amount of capital resources are large compared with the human resources.e.g. hydroelectricity, car production |
| capital resources | Man made resources that help in the production of other goods and services |
| central government | Parliament and many organisations such as government departments, ministries and state owned enterprises |
| centralised management structure | The flatter the structure, the more control the general manager or owner has over decision making. Most common with sole traders and partnerships |
| communication services examples | Telephones, email, fax post, courior. Print media:newspaper and magazines Electonic media: radio, tv and internet |
| company | Private and public. Access to large amounts of capital through share issues. Owners are called shareholders; profits paid out as dividends. Limited liability. |
| Consumer cooperative | A marketing organisation which the consumer onws, and share the profist in proportion to their purchases from the cooperative |
| consumer goods | Goods purchased by households |
| Decentralised management structure | Decision making is delegated to other managers. The general manager/owner is more concerned with the overall performance and goal of the business. More common with companies. |
| Demerit goods | Goods and services the governement considers harmful for us and tries to discourage their production or consumption |
| Diseconomies of scale | Increasing output beyond the technical optimum results in inefficient use of resources and rising average costs of production. |
| diversification | When a firm takes over another firm in an unrelated industry. They do this to spread the risk of business failure. |
| division of labour | Specialisation of workers in particular activities within a production process. Should produce greater output with fewer mistakes as workers become experts in their jobs and lower average costs. |
| Economies of scale | Witha proportionate increase in factor inputs and a more efficient use of resources the firm is able to lower average costs of production. |
| entrepreneur | People who organise the factors of production and take business risks to earn profits |
| financial economies | The ability to decrease interest rates by having a larger loan and thus decreasing a banks timer per dollar. |
| financial services examples | Financial advice; Provide funds; loans to purchase capital and stock, finance to finance customer credit; banking services: accept depositis. Cheque and EFTPOS, Forex |
| firms | Businesses that provide a goods or service for sonsumers or other firms |
| Horizontal integration | Two firms in the same industry at the same stage of production process combine to firm a larger business, ie: both firms do the same sort of thing |
| human resources | The work and effort of people. Seperated into labout and entrepreneurship. |
| Industry | Group of firms that manufacture a particular good or service e.g. publishing industry - firms who produce newspapers |
| Inputs | Resources used in the production process |
| Interdependence | A two way reliance in which BOTH parties need each other i.e. mutual reliance |
| intermediate goods | Components or parts that are inputs into the production process for a final product |
| Investment | The production/purchase of capital goods to be used in the production process |
| Labour intensive | Amount of human resources are largecompared to capital resources. eg: picking fruit, retail, restaurants |
| limited liability | The business is responsible for its own debts and the owners (shareholders) are able to keep their personal assests if the business fails. |
Combine with other sets
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