CHAPTER TWO | Classification of Business

Question 1

What are the three main stages of a business (define them)?

Answer 1

1. Primary sector: Make resources using the natural resources of the earth.
2. Secondary sector: Manufactures goods using the raw materials that are provided by the primary sector.
3. Territory sector: Provides service to both customers and businesses.

Question 2

Why are the three sectors (stages) of a business important?

Answer 2

1. Sources of some primary products have depleted.
2. Most countries are losing competitiveness in manufacturing
3. As a country’s total wealth increases and living standards rise, consumers tend to spend a higher proportion of their income on services rather than manufactured products.