1.2 – Classification of Businesses

Question 1

Primary sector:

Answer 1

this involves the use/extraction of natural resources.

Examples include agricultural activities, mining, fishing, wood-cutting, oil drilling etc.

Question 2

Secondary sector:

Answer 2

this involves the manufacture of goods using the resources from the primary sector.

Examples include auto-mobile manufacturing, steel industries, cloth production etc.

Question 3

Tertiary sector:

Answer 3

this consist of all the services provided in an economy.

This includes hotels, travel agencies, hair salons, banks etc.

Question 4

Private sector:

Answer 4

where private individuals own and run business ventures.

Their aim is to make a profit, and all costs and risks of the business is undertaken by the individual.

Examples, Nike, McDonald’s, Virgin Airlines etc.

Question 5

Public sector:

Answer 5

where 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.

Example: the Indian Railways is a public sector organization owned by the govt. of India