chapter 2 - classification of business

Question 1

definition of:

• primary sector
• secondary sector
• tertiary sector

Answer 1

• extracts and uses natural resources of earth to produce raw materials used by other business
• assembles, processes and manufactures goods using raw materials provided by the primary sector
• provide services to consumers and other sectors of industry

Question 2

definition of:
de-industrialisation

reasons for changes in relative importance of three sectors?

Answer 2

-decline in the important of secondary sector, manufacturing sector of industry in a country

• depletion if raw materials
• raw materials are discovered
• rising living standards
• high quantity in labour
• specialisation
• de-industrialisation

Question 3

definition of:

mixed economy

Answer 3

has both private and public sectors

Question 4

explain the differences between private sector and public sector

Answer 4

public sector

• businesses run by gov, gov make decisions
• aim: provide essential goods and services to community

private sector

• businesses not run by gov
• people have economic freedom to make decisions for their products (some by gov)
• aim: maximise profit

Question 5

definition of:
privatisation

why?

Answer 5

-the transfer of ownership from public sector businesses to private sector businesses

• more efficient
• invest more capital
• competition between priv. sector businesses are high-incentive to produce higher quality output