Chapter-2 Flashcards
Classification of businesses
What is a primary sector?
Primary sector consists of firms whose business activity involves the extraction of natural resources.
What is a secondary sector?
Secondary sector consists of firms that process and manufacture goods from natural resources.
What is a tertiary sector?
Tertiary sector consists of firms that supply a service to consumers and other businesses.
What is the chain of production?
The chain of production is the production and supply of goods to the final consumer involves activities from primary, secondary and tertiary sector businesses.
What does “LDC” stand for?
“LDC” stands for less developed country.
What does “MDC” stand for?
“MDC” stands for more developed country.
What are the reasons for a change in business classification in many countries?
1) Industrialization
2) De- industrialization
3) A change in consumer behaviour as a result of both industrialisation and de-industrialisation.
What is industrialisation?
Industrialisation is the growing importance of secondary sector business activity and reduced importance of primary sector business activity.
What is de-industrialisation?
De-industrialisation is the growing importance of the tertiary sector and the reduced importance of the secondary sector.
What are the factors causing a change in consumer behaviour?
1) Higher income
2) Better education
3) More leisure time
What are the factors causing a change in business behavior?
1) The need for finance to fund expansion so that businesses can compete in global markets.
2) The need to be able to communicate internally and externally quickly and as cheaply as possible to take advantage of the opportunities of wider markets.
3) The need to provide better services for employees, for example canteens; this in turn increases business demand for the goods and services of other businesses.
What is a mixed economy?
A mixed economy is an economy where the resources are owned and controlled by both the private and public sectors.
What is a private sector?
A private sector is the part of the economy that is owned and controlled by individuals and companies for profit.
What is a public sector?
Public sector is the part of the economy that is controlled by the state or government.
