Classification of businesses

Question 1

Define private sector

Answer 1

Businesses owned and controlled by a private individual or groups of individuals and not owned/controlled by the government.

Question 2

Explain the advantages that a business in the public sector may have
that a business in the private sector may not.

Answer 2

• Easier to finance because they are funded by a
  government.
• They are not under pressure to make a profit because they are
  often/usually providing essential goods and/or services.
• They do not have to pay dividends to shareholders.

Question 3

Define public sector

Answer 3

Businesses owned/controlled/run by a government. Their aim is to provide public goods and services to increase the welfare of the citzens

Question 4

Define primary sector

Answer 4

Extraction or collection of natural resources / raw materials such as mining/harvesting

Question 5

Define secondary sector

Answer 5

Processing and manufacturing goods from natural resources provided by the primary sector such as cloth production/

Question 6

Define competitive pricing

Answer 6

When businesses set a price similar to that of competitors products which are already established in the market

Question 7

Define tertiary sector

Answer 7

Services provided in an economy such as retail / law