Business Studies key terms 2

Word	Definition
Market	Where buyers and sellers meet to exchange goods and services.
Market forces	The forces of buying (or demand) and selling (or supply) which determine price and quantity bought and sold in a market.
Opportunity cost	The benefit lost from the next best alternative when making a choice.
Command economy	Economy where most consumer goods and services are produced by the public sector
Free market economy	Economy (or economic system) where over 60 per cent of consumer goods and services are produced by businesses and sold through markets.
Mixed Economy	Economy where over 40 per cent of consumer goods and services are produced by the state and not sold.
Private sector	The rest of the economy apart from the public sector, owned and controlled by private individuals and businesses.
Public Sector	Part of the economy owned and controlled by the state or government.
Chain of Production	The various production stages through which a product passes before being sold to a consumer.
Division of Labour	Specialisation of worker
Interdependence	Where economies, businesses, consumers and workers are linked together and reliant upon each other for their welfare.
Primary Industry	– Activities which mine, grow, collect or cut down raw materials, such as in ,mining or agriculture.
Secondary or Manufacturing Industry	Activities which transform primary products into manufactured goods.
Specialisation	System of production where economies, regions, businesses or people concentrate on producing certain products.
Tertiary or Service Industry	Activities which provide services.