Cambridge IGCSE Business Studies 300 questions and correct answers

Cambridge IGCSE Business Studies


A Need - correct answer A good or service essential for living.
A want - correct answer A good or service that people would like to have, but which is not
essential for living.
Economic problem - correct answer Unlimited wants but limited resources - this creates
scarcity.
Scarcity - correct answer Lack of sufficient products to satisfy total wants of population.
Opportunity Costs - correct answer The next best item given up by choosing another.
Factors of production - correct answer Resources needed to produce goods and services - land,
labour, capital and enterprise
Business - correct answer An organisation that combines factors of production to make goods
and services to satisfy people's wants and needs.
Specialisation - correct answer People and business concentrate on what they are best at.
Division of labour - correct answer Production is split into seperate tasks each worker
specialises in one task
Added Value - correct answer The difference between a product's selling price and the cost of
bought in materials.
Primary sector - correct answer Businesses that extract and use natural resources to produce
raw materials.
Secondary sector - correct answer Businesses that manufactures goods using raw materials
provided by primary sector.
Tertiary sector - correct answer Businesses that provide services to consumers and other firms.
Deindustrialisation - correct answer Decline in the importance of secondary, manufacturing
industry.
Mixed economy - correct answer This has both private sector businesses and public sector
businesses.
Private sector - correct answer Businesses owned by people, not the goverment/state.
Public sector - correct answer Businesses owned by goverment/state.
Privatisation - correct answer The sale of public sector business to private sector.
Entrepreneur - correct answer Someone who organises, operates and takes the risk for a new
business venture.

, Cambridge IGCSE Business Studies


Business plan - correct answer The objectives and details of the operations, finance and owners
of a new business.
Capital employed - correct answer The total value of capital used in a business.
Internal Growth - correct answer The business expands its existing operations.
External Growth - correct answer The business expands by merging with or taking over another
business.
Takeover - correct answer A business buys out the owners of another business.
Merger - correct answer The owners of businesses agree to join their firms together to form
one business.
Horizontal integration - correct answer The business integrates with another in the same
industry at the same stage of production.
Vertical integration - correct answer 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.
Conglomerate integration - correct answer The business integrates with another but in a
different industry.
Soletrader - correct answer The business is owned by one person.
Partnership - correct answer The business is jointly owned by two or more people.
Limited liability - correct answer The liability of owners/shareholders is limited to the amount
invested. Personal posessions are not at risk.
Incorporated business - correct answer A business with seperate legal identity from its owners.
Unincorporated business - correct answer A business without seperate legal identity from its
owners.
Private limited company - correct answer A business owned by shareholders but it cannot sell
shares to the public.
Public limited company - correct answer A business owned by shareholders but it can sell
shares to the public and its shares are tradable on Stock Exchange.
Shareholders - correct answer The owners of a limited company.
Dividends - correct answer Payments made to shareholders from profits (after tax) of a
company.