Chapter 20: Categories Of Business

Question 1

What are the three sectors of the Irish economy? Give examples for each.

Answer 1

Primary-Extractive industry. Taking raw materials from nature. E.g. Agriculture, Fishing.
Secondary-Manufacturing/Construction. Take raw materials from primary sectors and make them into a finished product. Made up of transnational, indigenous firms and agri-business. E.g. A carpenter turns wood into furniture.
Tertiary-Service Industry. Provides essential services. E.g. accountants, lawyers.

Question 2

What is the importance of the primary sector?

Answer 2

1. Creates Employment: Many Irish people work in the primary sector, less social welfare, more tax revenue and more government spending.
2. Consumption: Major consumer of Irish products which pumps money into the economy. E.g. Farmers buy Irish fertilisers and machinery.
3. Major exporter:Export massive amounts which brings money into the country which helps the Balance of Payments. Makes everyone in a country a little richer. E.g. Farmers export dairy and beef.
4. Provide food for the country which reduces the need for imports. Improves Balance of Payments as less money going out of country.

Question 3

Explain changing trends in primary sector. (4)

Answer 3

-Abolition of EU Quotas-Irish farmers can sell more in emerging markets. E.g. Africa.
-Less dependence on foreign oil-extract our own natural resources. E.g. Wind Farms.
-Grants to encourage forestry to help combat climate change. E.g. Diversified farming.
-Increase in demand for organic food-Farmers capitalise on Ireland’s green image. E.g. Farmers markets.

Question 4

Explain agri-business, indigenous and transnational?

Answer 4

Agri-business: take farm produce and turn them into food. E.g. Denny.
Indigenous: A business set up, owned and managed by Irish people. Products made in Ireland and sold here and exported. E.g. Supermacs
Transnational: A business with a head office in one country and branches in a number of different countries. E.g. Intel

Question 5

Explain the changes in the secondary sector.

Answer 5

Competition from low wage economies-can manufacture goods cheaper so Irish factories closed and moved abroad. E.g. China
Higher energy costs-Pay more to run machines some businesses have to close down as profits lowered.
Fewer employees and more machines. Capital intensive. Fewer Irish people employed.
Transnational setup to make products here and access the European market. E.g. Dell

Question 6

What is the importance of the construction/manufacturing industry in Ireland? (4) (One exclusive point for each)

Answer 6

Labour intensive industry that provides lots of jobs. Less social welfare, more tax revenue and more government spending.
Major consumer in Irish economy of raw materials. Buy output of primary sector turn it into finished product. E.g. Tayto buy Irish potatoes.

(Construction Only) Builds infrastructure. Helps attract multinational companies which require good distribution networks and skilled workforces. E.g. Schools, roads, hospitals.

(Manufacturing Only) Exports: Manufactured here and exported. Brings money into country and increasing general wealth. Helps with Balance of Payments.

Question 7

List trends in construction.

Answer 7

-Cost of Living Crisis leaving many not able to afford mortgages or even rents.
-Homeless crisis and lack of family housing leads to high demand.
-Vulture funds make single landlords unable to compete.
-Lack of capital available for builders to buy expensive land.

Question 8

What is the importance of the tertiary sector?

Answer 8

1. Biggest employer.
2. Exports help Balance of Payments and creates wealth.
3. Well developed services attract transnationals. Good distribution and well-educated workforce.

Question 9

What are the trends in the tertiary sector?

Answer 9

Approaching recession means restaurants, hotels and pubs are seeing an downturn.
Trend of buying goods and service online sees high street retailers struggling.
Less international visitors to Ireland after the Covid-19 pandemic.
Struggling financial sector in IFSC. e.g. Pension

Question 10

Explain the factors of production and give the reward of each.

Answer 10

1. Land: Natural resources that go into making a product. E.g. Tayto potatoes. Reward: Rent
2. Labour: Human effort needed to operate business and make products. E.g Workers in the crisp factory. Reward: Wages
3. Capital: All finance, machinery and equipment invested. Human-made goods used in production. E.g. Machines that make crisps. Reward: Interest & Dividends
4. Enterprise: Initiative that is required for a business to succeed. Skill of combining factors of production to make a product. Involves thinking up an idea and taking the risk to set up a business. E.g. Mr. Tayto Reward: Profit

Question 11

Explain one challenge facing indigenous firms.

Answer 11

Increased Competition from large foreign businesses: Competitors with huge economies of scale makes it difficult for small Irish firms to compete. E.g. Local pharmacies versus Boots

Question 12

Explain five reasons why multinational companies locate in Ireland.

Answer 12

Access to EU Market-free trade between member states, manufacture in Ireland and not pay any tarifs. E.g. Pfizer distribute products from Ireland to Eu.

Well-educated workforce-Most Irish workers have minimum second level education and large amount have third level. Allows MNC’s access to a skilled workforce. E.g. Microsoft need skilled workers.

Low Corporation Tax: 12.5% rate is one of lowest in the world reduces tax liability for business and encourages them to set up here and retain more of their profits. E.g. Apple set up here to minimise tax liability.

English-Speaking Nation-Ireland is now the only English speaking nation in the Eu. For MNC’s from USA it is much easier to set up here than anywhere else avoiding communication barriers. E.g. PayPal set up in Ireland

Grants-Irish government gives money to MNC’s to help them set up here. Easier to expand here.