Chapter 2 - Mariela Yabeta Flashcards
Classification of businesses
Define secondary sector
Businesses that manufacture goods using the raw materials provided by the primary sector.
Give examples of businesses that operate in the public sector
Health, education, defence, public transport, water supply, electricity supply.
What is meant by mixed economy?
this has both private and public sector businesses.
Identify and explain advantages of privatisation
- Private sectors are often more efficient since the main objective is profit and therefore costs must be controlled.
- Private owners invest more capital.
- Competition can help improve the quality of the products or services.
Identify and explain disadvantages of privatisation
- Might make more workers unemployed since businesses have to cut the costs.
- Less likely to focus on social objectives.
Identify and explain reasons for deindustrialisation
- natural resources for secondary sector become depleted
- most developed economies are losing competitiveness in manufacturing to the newly industrialized countries
- as a country’s total wealth increases and living standards rise, consumers spend more of their incomes on services for ex. travel and restaurants.
Define deindustrialisation
decline in the importance of the secondary, manufacturing industry.
State how the three sectors of economy are compared
by checking:
- the % of the country’s total number of workers employed in each sector
- the value of output of goods and services and the proportion this is of the total national output
Explain reasons why the relative importance of primary output may fall in a country
- An increase in the % of educated people might create conditions for the development of secondary and and tertiary sectors.
- higher incomes which means people now spend more money on services and manufactured goods. More demand
- globalisation might encourage people to export their manufactured products
Define private sector
businesses owned by people, not the government/state
