BUS141 Flashcards
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What is primary production?
The extraction of natural resources from the land, air, and sea for use in production.
What are some examples of primary production activities?
Farming, fishing, oil extraction, mining for metals and coal, and tapping rubber from trees.
Is primary production considered a final product?
No, it is not a final product.
What does secondary production involve?
The manufacturing or processing of natural resources (raw materials) into usable products (finished goods).
What are some examples of secondary production processes?
Converting raw materials into components (e.g., making plastics from oil) and assembling products (e.g., building houses, bridges, roads, and food).
What is the significance of the manufacturing and assembly process in secondary production?
It transforms raw materials into finished goods that can be used by consumers and businesses.
What does tertiary production involve?
The provision of services to customers and other businesses.
What are some examples of commercial services in tertiary production?
Insurance, transport, advertising, warehousing.
Besides commercial services, what other types of services are included in tertiary production?
Teaching, restaurants, and health care.
What does the quaternary sector consist of?
Industries providing information services.
What are some examples of services in the quaternary sector?
Computing, ICT (information and communication technologies), consultancy, and R&D (research and development).
What are privately owned businesses?
Businesses or organizations owned and controlled by individuals or groups of individuals, including other businesses.
Who controls privately owned businesses?
Private businesses or individuals.
What is one feature of public sector organizations regarding ownership?
They have a specific number of members and owners.
What aspect of public sector organizations is related to liability?
The liability status of members and the legal status of the business.
How do public sector organizations differ in terms of establishment?
They have a distinct method of formation.
What is a key feature of public sector organizations concerning financing?
The source of capital or finance is typically public funds.
: How is control exercised in public sector organizations?
They have a specific method of control, often regulated by government policies.
What type of business is owned by one person who provides permanent finance?
A sole proprietorship.
What rights does the owner of a sole proprietorship have?
The owner has full control of the business and is able to keep all profits.
What is one advantage of being a sole trader?
It is easy to set up, The owner keeps all profits, The owner has complete control and is not answerable to anyone, The owner can choose times and patterns of working, Close personal relationships with staff and customers, The business can be based on the interests or skills of the owner.
Disadvantages of being a sole trader
They have unlimited liability, Intense competition from larger firms, The owner is unable to specialize in areas of the business that are most interesting, Difficulty in raising additional capital, Long hours, Lack of continuity.
What is a partnership?
An agreement between two or more (maximum twenty) persons or organizations to carry on business together, usually with the aim of making a profit.
Is a formal deed of partnership required?
It is usual to draw up a formal deed of partnership (partnership agreement), but the agreement can also be oral.
