Business Sectors

Question 1

Define the Primary Sector.

Answer 1

Businesses collect and extract raw materials and natural resources.

Question 2

Give 4 examples of the Primary Sector.

Answer 2

• Farming
• Forestry
• Mining
• Agriculture

Question 3

Define the Secondary Sector.

Answer 3

• Transform raw materials
• Manufacturing industry
• Further processing

Question 4

Give 4 examples of the Secondary Sector.

Answer 4

• Construction
• Factories
• Electricity
• Manufacturing

Question 5

Define the Tertiary Sector.

Answer 5

• Offer services
• Service industry
• Facilitates transport,distribution and sale of goods.

Question 6

Give 4 examples of the Tertiary Sector.

Answer 6

• Financing
• Storage
• Tourism
• Hospitality

Question 7

What is the relationship between these 3 Sectors?

Answer 7

• Economic chain of production
• Gathers materials
• Transforms materials
• Sells goods or services

Question 8

What is the meaning of the Formal Sector?

Answer 8

• Registered and pay taxes
• Register with CIPC
• Register with SARS
• Liable to pay tax on turnover and profits

Question 9

What does CIPC stand for?

Answer 9

Companies and Intellectual Property Commission

Question 10

What does SARS stand for?

Answer 10

South African Revenue Services

Question 11

What is the meaning of the Informal Sector?

Answer 11

• Not registered and don’t pay tax
• Workers who are self-employed
• Owners take responsibility

Question 12

Provide 4 differences between Formal and Informal Sector.

Answer 12

Formal
- Registered with CIPC
- Pay tax to SARS
- Activities are monitored by government.
- Income is regular weekly/monthly

Informal
- Not registered with CIPC
- Don’t pay tax
- Activities not monitored by government
- Income is irregular and inconsistent

Question 13

Why is the Formal Sector important?

Answer 13

• GDP figures
• Taxes on profits
• Employees pay personal income tax
• Large variety of goods and services

Question 14

Why is the Informal Sector important?

Answer 14

• Encourages entrepreneurship and self-employment.
• Easy to enter
• Work experience
• Employment opportunities for communities

Question 15

What is the meaning of the Public Sector?

Answer 15

• Owned and managed by government
• Sate-owned companies
• No private companies, household and voluntary organisations.

Question 16

What is the meaning of the Private Sector?

Answer 16

• Owned, financed and run by private individuals
• Aim is to make a profit
• Sole traders, Partnerships, Profit companies and Closed Corporations

Question 17

Name 4 purposes of the Public Sector.

Answer 17

• Equal distribution of wealth
• Job opportunities
• Improves general standard of living
• Limits anti-competitive behaviour

Question 18

Name 4 purposes of the Private Sector.

Answer 18

• Job opportunities
• Opportunity to create wealth for growth
• Contributes to tax revenues.
• Offers large variety of goods

Question 19

Provide 4 diffferences of the Public and Private Sector.

Answer 19

Public
- Equal distribution of wealth
- Goods and services provided by government.
- Improves general standard of living
- Provides infrastructure to support Private Sector

Private
- Opportunities for businesses to create wealth
- Provides goods and services with aim of making a profit.
- Uplifts community through corporate social responsibility programs
- Support Public sector through public-private-partnership agreements.