IGCSE Business Studies 0450 Exam|
Questions And Answers | Latest Exam
2026-2027 | 100%Guaranteed Pass
Need -ANSWER A good or service that is essential for people's living
Want -ANSWER A good or service which people want to have, not essential
Economic problem -ANSWER When wants exceed the resource available to make
scarcity
Scarcity -ANSWER when there are unlimited wants but limited resources
Factors of Production (4) -ANSWER Land, labor, capital, enterprise
Opportunity cost -ANSWER The next best alternative choice given up as another was
chosen
Specialization -ANSWER When workers specialize in one task which they do, best at
Division of labor -ANSWER When labor force is divided into sections in which people at
those sections are specialized in one particular job
Purpose of business activity -ANSWER Combine 4 factors of production and make
products/services
Added value -ANSWER Selling price - cost of making products
Primary sector -ANSWER Where people extract natural resources from earth and turn
them into raw materials
Secondary sector -ANSWER Turn raw materials into products
Tertiary sector -ANSWER Provide services to customers and sell products
De-industrialization -ANSWER Decline of importance for secondary sector
Mixed economy -ANSWER Has private and public sector businesses
Private sector -ANSWER Businesses own by individuals
Public sector -ANSWER Businesses own by the government
, Capital -ANSWER Money (invested into a business)
Entrepreneur -ANSWER A person who combines all 4 factors of production together
Qualities of an entrepreneur -ANSWER Risk-taking, confident, patient, optimistic,
creative, hard-working
Business plan -ANSWER A plan which outlines a business' objectives, name of
organization, finance and owners of business
Capital employed -ANSWER Amount of money invested into a business
Comparing the size of businesses (4) -ANSWER Number of employees, output, sales
and capital employed
Why owners want business to grow -ANSWER More profit, status, lower average costs,
more market share
Expansion problems (4) -ANSWER Bad communication, management, increase
expansion costs
Why business want to stay small -ANSWER Nature of product/service, owner wants,
market size
Why business fail -ANSWER Poor management (finance), communication, rapid
expansion, failure plan to change, risks when start up
Internal growth -ANSWER Growth within the business (more branches, expansion)
External growth -ANSWER Growth outside of the business (integration, etc.)
Merger -ANSWER When two businesses agree upon joining together into one
Takeover -ANSWER When a business buys another business firm and make into one
Horizontal integration -ANSWER Joining with another business in the same sector
Vertical integration -ANSWER Joining with another business in a different sector (forward,
backward vertical integration)
Conglomeration integration -ANSWER When a business merge with another of a different
industry
Diversification -ANSWER
Sole trader -ANSWER When a business is owned by one single person
Questions And Answers | Latest Exam
2026-2027 | 100%Guaranteed Pass
Need -ANSWER A good or service that is essential for people's living
Want -ANSWER A good or service which people want to have, not essential
Economic problem -ANSWER When wants exceed the resource available to make
scarcity
Scarcity -ANSWER when there are unlimited wants but limited resources
Factors of Production (4) -ANSWER Land, labor, capital, enterprise
Opportunity cost -ANSWER The next best alternative choice given up as another was
chosen
Specialization -ANSWER When workers specialize in one task which they do, best at
Division of labor -ANSWER When labor force is divided into sections in which people at
those sections are specialized in one particular job
Purpose of business activity -ANSWER Combine 4 factors of production and make
products/services
Added value -ANSWER Selling price - cost of making products
Primary sector -ANSWER Where people extract natural resources from earth and turn
them into raw materials
Secondary sector -ANSWER Turn raw materials into products
Tertiary sector -ANSWER Provide services to customers and sell products
De-industrialization -ANSWER Decline of importance for secondary sector
Mixed economy -ANSWER Has private and public sector businesses
Private sector -ANSWER Businesses own by individuals
Public sector -ANSWER Businesses own by the government
, Capital -ANSWER Money (invested into a business)
Entrepreneur -ANSWER A person who combines all 4 factors of production together
Qualities of an entrepreneur -ANSWER Risk-taking, confident, patient, optimistic,
creative, hard-working
Business plan -ANSWER A plan which outlines a business' objectives, name of
organization, finance and owners of business
Capital employed -ANSWER Amount of money invested into a business
Comparing the size of businesses (4) -ANSWER Number of employees, output, sales
and capital employed
Why owners want business to grow -ANSWER More profit, status, lower average costs,
more market share
Expansion problems (4) -ANSWER Bad communication, management, increase
expansion costs
Why business want to stay small -ANSWER Nature of product/service, owner wants,
market size
Why business fail -ANSWER Poor management (finance), communication, rapid
expansion, failure plan to change, risks when start up
Internal growth -ANSWER Growth within the business (more branches, expansion)
External growth -ANSWER Growth outside of the business (integration, etc.)
Merger -ANSWER When two businesses agree upon joining together into one
Takeover -ANSWER When a business buys another business firm and make into one
Horizontal integration -ANSWER Joining with another business in the same sector
Vertical integration -ANSWER Joining with another business in a different sector (forward,
backward vertical integration)
Conglomeration integration -ANSWER When a business merge with another of a different
industry
Diversification -ANSWER
Sole trader -ANSWER When a business is owned by one single person
