1.2 classification of business Flashcards
primary sector
this involves the use/extraction of natural resources.
Examples include agricultural activities, mining, fishing, wood-cutting, oil drilling etc.
Secondary sector
this involves the manufacture of goods using the resources from the primary sector.
Examples include auto-mobile manufacturing, steel industries, cloth production etc.
Tertiary sector
this consist of all the services provided in an economy.
This includes hotels, travel agencies, hair salons, banks etc.
importance of sector measured
measured by:
- the percentage of workers employed in each
- output produced by each
countries through sector
developing: primary because less standard of living
developed: secondary and tertiary cuz goods bought in from other places and demand for services is high
de industrialization
decline in the importance of the secondary sector in the country
reasons why industries loose importance:
- sources of primary product deplete
- loose comp in the manufacturing industry to newly industrialized country
- increased living standard= demand for services
industrialization
increase in the primary sector
private sector
where private individuals own and run business ventures(not gov owned).
Their aim is to make a profit, and all costs and risks and decisions of the business are undertaken by the individual.
Examples, Nike, McDonald’s, Virgin Airlines etc.
public sector
the government owns and runs business ventures.
Their aim is to provide essential public goods and services (schools, hospitals, police etc.) in order to increase the welfare of their citizens,
they don’t work to earn a profit. It is funded by the taxpaying citizens’ money, so
they work in the interest of these citizens to provide them with services.
mixed economy
the balance between sectors by privatisation
why is privitsation good
- more efficent cuz obj profit
- more capital invested afford
- comp improv quality
