1.1 The Purpose and Nature of Businesses

Question 1

What are some reasons for setting up a business? (3 reasons)

Answer 1

• Some businesses can be set up when someone starts making a good or a service that they think customers will want to pay for.
• Some people start businesses that distribute goods. E.g. Curry’s PC world.
• Some people set up a business because they see a business opportunity that they want to fulfil.

Question 2

What are the three sectors of economy?

Answer 2

1) Primary Sector
2) Secondary Sector
3) Tertiary Sector

Question 3

What does a business in the Primary Sector do?

Answer 3

It produces raw materials which are used to make goods or services.

Question 4

What does a business in the Secondary Sector do? Give an example of a business in the secondary sector.

Answer 4

It manufactures goods by turning raw materials into finished goods. For example, a chocolate factory turns raw materials such as cocoa and milk into chocolate.

Question 5

What sector are building and construction industries in?

Answer 5

Secondary Sector

Question 6

What do businesses in the tertiary sector do? Give an example of a business in the tertiary sector.

Answer 6

They provide a service. For example, a hairdressers provides services for consumers.