Chapter 2-classificstion Of Businesses Flashcards
What are the stages of economic activity
Primary
Secondary
Tertiary
What does the primary sector do
Extracts+uses natural resources of the earth to produce raw materials used by other businesses
What does the secondary sector do
Manufactures goods using raw materials provide by the primary sector. Semi-finished products
What does the tertiary sector do
Provides services to consumers and other sectors of industry
How is the relative importance of economic sectors calculated(2)
Percentage of countries total no. Of workers employed in each sector
Value of output of goods+services in proportion to the countries total output
What is common to find in economically developed countries
That majority of the countries manufactured goods are brought in
What sector does an entrepreneur fall in?
Tertiary, but the business doesn’t have to be
What is de-industrialisation
The decline in importance of the secondary sector
What are reasons for change in importance in the sectors (3)
Depleted resources
Loss of competitiveness to newly developed countries
People spend higher % of profit on tertiary that primary products
What is a mixed economy
An economy with private and public sectors
Public sector
Government/state owned business
What is privatisation
The selling of public sector companies to private
Why does privatisation occur
The private sector is seen as more efficient, owner might invest more capital
Competition
How can we divide an industry into sectors (2)
By ownership (public/private)
By activity (primary,secondary,tertiary)
Differences between public and private sector activities
Private is more efficient as they are driven through profit motive and competition, they also tend to produce higher quality. Public sector employs more people and work towards social objectives
