Important Definitions

2. combine factors of production to make products (goods and services) which satisfy people’s wants
5. when the owners of two businesses agree to join their businesses together to make one business.
7. lack of sufficient products to fulfil the total wants of the population.
8. good or service which people would like to have, but which is not essential for living. \
9. a business based upon the use of the brand names, promotional logos and trading methods of an existing successful business. The franchisee buys the licence to operate this business from the franchisor
11. owners of a limited company. They buy shares which represent partownership of the company
13. there is a decline in the importance of the secondary, manufacturing sector of industry in a country.
15. any person or group with a direct interest in the performance and activities of a business

1. a person who organises, operates and takes the risk for a new business venture
3. people and businesses concentrate on what they are best at
4. form of business in which two or more people agree to jointly own a business.
6. payments made to shareholders from the profits (after tax) of a company. They are the return to shareholders for investing in the company.
10. money invested into a business by the owners.
12. total income of a business (revenue) less total costs
14. good or service essential for living. Food, water, clothing and Shelter
16. when one business buys out the owners of another business, which then becomes part of the ‘predator’ business (the business which has taken it over).