1.2 - classification of businesses

Question 1

what are the 3 economic sectors and what occurs in them?

Answer 1

• Primary - extraction of raw materials from the earth e.g. mining, fishing
• Secondary - manufacturing of goods from raw materials provided by the primary sector e.g. car manufacturing, footwear production
• Tertiary - providing of services to consumers using products from the secondary sector e.g. restaurants, retail, banking

Question 2

what is the private sector?

Answer 2

businesses owned by private individuals and not the government. they decide themselves on the price to charge for good/service. private sector business’ main aim is profit. ​

Question 3

what is the public sector?

Answer 3

government owned and controlled businesses and organisation. The money for these come from taxpayers. the aim of public sector businesses is to provide welfare to people in the economy.

Question 4

what is a mixed economy?

Answer 4

an economy with private and public sectors

Question 5

why does the importance of business classification change?

Answer 5

as an economy grows, the primary sector gets smaller and the secondary and tertiary grow as they can afford to ship in primary products from other countries.