IB Business and Management [Only
SL] Full Revision(All Chapters) |
Questions And Answers | Latest Exam
2026-2027 | Graded A+
Added Value -ANSWER The difference between a product's price and the total cost of
the inputs that went into making it; the extra worth created in the production process.
Businesses -ANSWER Organizations that are involved in the production of goods and/or
the provision of services.
Capital -ANSWER All non-natural resources used in the production process; examples:
money, resources (machinery, tools, equipment, factories).
Division of Labor -ANSWER The specialization of workers in the provision of goods
and/or services by breaking a job down into particular roles or components that are
repeated by the same workers.
Entrepreneurs -ANSWER People who manage, organize, and plan the other three factors
of production; risk takers who exploit business opportunities in return for profits.
Factors of Production -ANSWER The inputs (or resources) necessary for the production
process: land, labor, capital, and enterprise (aka entrepreneurship).
Functional Areas -ANSWER Refer to the different sections of a business, i.e. marketing,
production, finance, and human resource departments.
Labor -ANSWER The physical and mental human effort used in the production process.
Land -ANSWER Natural resources that can be found on the planet, including renewable
and non-renewable natural resources such as water, fish, wood, and physical land itself.
Opportunity Cost -ANSWER The cost measured in terms of the next best alternative that
is foregone when a choice is being made, e.g. money today can be either spent for
immediate benefit or saved for the future.
Primary Sector -ANSWER The businesses involved in the cultivation or extraction of
natural resources, such as farming, mining, quarrying, fishing, oil exploration, and
forestry.
Secondary Sector -ANSWER The section of the economy where business activity is
concerned with the construction and manufacturing of physical products; automation
,and mechanization in modern societies has seen this sector decline in terms of
employment.
Tertiary Sector -ANSWER The section of the economy where business activity is
concerned with the provision of services to customers; in modern societies, it is the
largest sector in terms of employment and output.
Articles of Association -ANSWER the document that sets out the internal organization
and rules of a limited company, including the powers of each director and voting rules; a
compulsory document needed to set up a company
Certificate of Incorporation -ANSWER the document issued to a limited company to show
that it has been legally formed and is therefore a separate legal entity from its owners;
this certificate allows the company to begin trading shares
charities -ANSWER not-for-profit organizations that are established to support good
causes, from society's point of view; examples include the prevention of animal cruelty,
the preservation of the natural environment, or providing assistance to the elderly
company -ANSWER a business that is owned by shareholders; it possesses a certificate
of incorporation that gives it a separate legal identity from its owners
Deed of Partnership -ANSWER the legal contract signed by the owners of a partnership;
the formal document includes the fundamental issues of the business, such as the
name and responsibilities of each partner and their share of any profits or losses
incorporation -ANSWER there is a legal difference between the owners of a company
and the business itself that ensures that the owners are safeguarded against any losses
made by the company as the owners are protected by limited liability
limited Liability -ANSWER a restriction on the amount of money that can be lost from the
owners of a business if it goes into bankruptcy; the owners will lose no more than the
amount of capital that they put into the business
Memorandum of Association -ANSWER the name of one of the legal documents required
to create an incorporated company; it includes the basic information of the organization
such as the name and address of the company, its objectives, and details of its share
capital
Non-governmental organization (NGO) -ANSWER any private sector organization that
does not primarily aim to make a profit; rather, they operate for the benefit of others in
society; examples include World Wildlife Fund and Friends of the Earth
Partnership -ANSWER a form of private sector business owned by 2-20 people (partners)
who share the responsibilities and burdens of running and owning the business
,Private Limited Company -ANSWER a business organization owned by shareholders with
limited liability but whose shares cannot be bought by or sold to the general public
private sector -ANSWER the part of the economy under the control of private individuals
and businesses, rather than the government, e.g. sole traders, partnerships, and limited
companies
Public Limited Company -ANSWER an incorporated business organization that allows the
general public to buy and sell shares in the company via a stock exchange
public corporations -ANSWER organizations wholly owned by the government but run as
commercial establishments, e.g. the British Broadcasting Corporation (BBC); also
known as state-owned enterprises
public sector -ANSWER the part of the economy controlled by the government, e.g. state
health and education services, emergency services, and national defense
Stock Exchange -ANSWER the market place for trading stocks and shares of public
limited companies; examples include the London Stock Exchange (LSE) and the New
York Stock Exchange (NYSE)
silent partner -ANSWER an investor of a partnership who is not directly involved in the
daily activities of the business; also known as sleeping partner
sole trader -ANSWER a self-employed person who runs the business on their own and
has sole responsibility for its success (profits) or failure (unlimited liability)
unlimited liability -ANSWER a feature of sole traders and ordinary partners who are
legally liable for all monies owed to their creditors, even if this means that they have to
sell their personal possessions to pay for this
aims -ANSWER the long-term goals of a business, often expressed in the firm's mission
statement; a general statement of a firm's purpose or intentions and tend to be
qualitative in nature
corporate social responsibility (CSR) -ANSWER the consideration of ethical and
environmental issues relating to business activity; a CSR allows the business to act
morally towards its various stakeholder groups
ethics -ANSWER the moral values that determine and affect business behavior and
decision-making, such as taking actions that are in the best interest of the world's
scarce resources
mission statement -ANSWER the declaration of an organization's overall purpose; it
forms the foundation for setting the objectives of a business
, objectives -ANSWER the relatively shorter term targets of an organization; often
expressed as SMART objectives
SMART objectives -ANSWER well-set objectives ought to be Specific, Measurable,
Agreed, Realistic, and Timed
social audit -ANSWER an independent assessment of how an organization's actions
affect society; likely to include a review of the firm's environmental impact, staff
management, and contributions to society
social responsibility -ANSWER a business being conscientiously concerned about the
well-being of the general public as a whole; socially responsible organizations are likely
to act in an ethical manner and consider the needs of all their stakeholders
strategy -ANSWER the various methods that businesses can use in an attempt to
achieve their mission or vision; it forms the long-term plans for the whole organization
tactics -ANSWER the short-term methods that firms can use to achieve their objectives
vision statement -ANSWER an organization's long-term aspirations, i.e. where it
ultimately wants to be
conflict -ANSWER situations where people have disagreements on certain matters due to
differences in their opinions; can often lead to arguments and tension between various
stakeholder groups
directors -ANSWER the senior members of staff who have been elected by shareholders
of a company to run the business on their behalf
external stakeholders -ANSWER do not form part of the organization but have a direct
interest or involvement in the actions of the organization; examples include customers,
suppliers, and the government
industry trade groups (Trade Associations) -ANSWER organizations that specialize in
promoting the aims of a particular industry through education and public relations
campaigns; also known as trade associations
internal stakeholders -ANSWER members of the organization, i.e. the employees,
shareholders (who own the business), managers, and directors of the business
managers -ANSWER the people responsible for the day-to-day operations of a business
or a department within a business; accountable to Directors and responsible for their
staff teams
pressure groups -ANSWER a type of special interest group which consists of individuals
with a common concern who seek to place demands on organizations to act in a
SL] Full Revision(All Chapters) |
Questions And Answers | Latest Exam
2026-2027 | Graded A+
Added Value -ANSWER The difference between a product's price and the total cost of
the inputs that went into making it; the extra worth created in the production process.
Businesses -ANSWER Organizations that are involved in the production of goods and/or
the provision of services.
Capital -ANSWER All non-natural resources used in the production process; examples:
money, resources (machinery, tools, equipment, factories).
Division of Labor -ANSWER The specialization of workers in the provision of goods
and/or services by breaking a job down into particular roles or components that are
repeated by the same workers.
Entrepreneurs -ANSWER People who manage, organize, and plan the other three factors
of production; risk takers who exploit business opportunities in return for profits.
Factors of Production -ANSWER The inputs (or resources) necessary for the production
process: land, labor, capital, and enterprise (aka entrepreneurship).
Functional Areas -ANSWER Refer to the different sections of a business, i.e. marketing,
production, finance, and human resource departments.
Labor -ANSWER The physical and mental human effort used in the production process.
Land -ANSWER Natural resources that can be found on the planet, including renewable
and non-renewable natural resources such as water, fish, wood, and physical land itself.
Opportunity Cost -ANSWER The cost measured in terms of the next best alternative that
is foregone when a choice is being made, e.g. money today can be either spent for
immediate benefit or saved for the future.
Primary Sector -ANSWER The businesses involved in the cultivation or extraction of
natural resources, such as farming, mining, quarrying, fishing, oil exploration, and
forestry.
Secondary Sector -ANSWER The section of the economy where business activity is
concerned with the construction and manufacturing of physical products; automation
,and mechanization in modern societies has seen this sector decline in terms of
employment.
Tertiary Sector -ANSWER The section of the economy where business activity is
concerned with the provision of services to customers; in modern societies, it is the
largest sector in terms of employment and output.
Articles of Association -ANSWER the document that sets out the internal organization
and rules of a limited company, including the powers of each director and voting rules; a
compulsory document needed to set up a company
Certificate of Incorporation -ANSWER the document issued to a limited company to show
that it has been legally formed and is therefore a separate legal entity from its owners;
this certificate allows the company to begin trading shares
charities -ANSWER not-for-profit organizations that are established to support good
causes, from society's point of view; examples include the prevention of animal cruelty,
the preservation of the natural environment, or providing assistance to the elderly
company -ANSWER a business that is owned by shareholders; it possesses a certificate
of incorporation that gives it a separate legal identity from its owners
Deed of Partnership -ANSWER the legal contract signed by the owners of a partnership;
the formal document includes the fundamental issues of the business, such as the
name and responsibilities of each partner and their share of any profits or losses
incorporation -ANSWER there is a legal difference between the owners of a company
and the business itself that ensures that the owners are safeguarded against any losses
made by the company as the owners are protected by limited liability
limited Liability -ANSWER a restriction on the amount of money that can be lost from the
owners of a business if it goes into bankruptcy; the owners will lose no more than the
amount of capital that they put into the business
Memorandum of Association -ANSWER the name of one of the legal documents required
to create an incorporated company; it includes the basic information of the organization
such as the name and address of the company, its objectives, and details of its share
capital
Non-governmental organization (NGO) -ANSWER any private sector organization that
does not primarily aim to make a profit; rather, they operate for the benefit of others in
society; examples include World Wildlife Fund and Friends of the Earth
Partnership -ANSWER a form of private sector business owned by 2-20 people (partners)
who share the responsibilities and burdens of running and owning the business
,Private Limited Company -ANSWER a business organization owned by shareholders with
limited liability but whose shares cannot be bought by or sold to the general public
private sector -ANSWER the part of the economy under the control of private individuals
and businesses, rather than the government, e.g. sole traders, partnerships, and limited
companies
Public Limited Company -ANSWER an incorporated business organization that allows the
general public to buy and sell shares in the company via a stock exchange
public corporations -ANSWER organizations wholly owned by the government but run as
commercial establishments, e.g. the British Broadcasting Corporation (BBC); also
known as state-owned enterprises
public sector -ANSWER the part of the economy controlled by the government, e.g. state
health and education services, emergency services, and national defense
Stock Exchange -ANSWER the market place for trading stocks and shares of public
limited companies; examples include the London Stock Exchange (LSE) and the New
York Stock Exchange (NYSE)
silent partner -ANSWER an investor of a partnership who is not directly involved in the
daily activities of the business; also known as sleeping partner
sole trader -ANSWER a self-employed person who runs the business on their own and
has sole responsibility for its success (profits) or failure (unlimited liability)
unlimited liability -ANSWER a feature of sole traders and ordinary partners who are
legally liable for all monies owed to their creditors, even if this means that they have to
sell their personal possessions to pay for this
aims -ANSWER the long-term goals of a business, often expressed in the firm's mission
statement; a general statement of a firm's purpose or intentions and tend to be
qualitative in nature
corporate social responsibility (CSR) -ANSWER the consideration of ethical and
environmental issues relating to business activity; a CSR allows the business to act
morally towards its various stakeholder groups
ethics -ANSWER the moral values that determine and affect business behavior and
decision-making, such as taking actions that are in the best interest of the world's
scarce resources
mission statement -ANSWER the declaration of an organization's overall purpose; it
forms the foundation for setting the objectives of a business
, objectives -ANSWER the relatively shorter term targets of an organization; often
expressed as SMART objectives
SMART objectives -ANSWER well-set objectives ought to be Specific, Measurable,
Agreed, Realistic, and Timed
social audit -ANSWER an independent assessment of how an organization's actions
affect society; likely to include a review of the firm's environmental impact, staff
management, and contributions to society
social responsibility -ANSWER a business being conscientiously concerned about the
well-being of the general public as a whole; socially responsible organizations are likely
to act in an ethical manner and consider the needs of all their stakeholders
strategy -ANSWER the various methods that businesses can use in an attempt to
achieve their mission or vision; it forms the long-term plans for the whole organization
tactics -ANSWER the short-term methods that firms can use to achieve their objectives
vision statement -ANSWER an organization's long-term aspirations, i.e. where it
ultimately wants to be
conflict -ANSWER situations where people have disagreements on certain matters due to
differences in their opinions; can often lead to arguments and tension between various
stakeholder groups
directors -ANSWER the senior members of staff who have been elected by shareholders
of a company to run the business on their behalf
external stakeholders -ANSWER do not form part of the organization but have a direct
interest or involvement in the actions of the organization; examples include customers,
suppliers, and the government
industry trade groups (Trade Associations) -ANSWER organizations that specialize in
promoting the aims of a particular industry through education and public relations
campaigns; also known as trade associations
internal stakeholders -ANSWER members of the organization, i.e. the employees,
shareholders (who own the business), managers, and directors of the business
managers -ANSWER the people responsible for the day-to-day operations of a business
or a department within a business; accountable to Directors and responsible for their
staff teams
pressure groups -ANSWER a type of special interest group which consists of individuals
with a common concern who seek to place demands on organizations to act in a
