Private and public sector

Question 1

What is private sector

Answer 1

A private sector is a part of the economy that is funded by private individuals. (family members, close friends, share holders) and is therefore is owned and controlled by private firms.

Question 2

Examples of firms in private sector

Answer 2

1. One owner business such as small shops
2. family owned business

3.large business with several investors

4.multinational companies

Question 3

Advantages of private sector

Answer 3

Advantages

1. Innovation and Efficiency
2. Competition: Competition within the private sector fosters innovation and drives down prices, benefiting consumers.
3. Investment and Economic Growth: Private sector investments drive economic growth by creating new businesses, expanding existing ones, and stimulating demand for goods and services.

Disadvantages

1. Inequality: The pursuit of profit in the private sector can lead to income inequality, as wealth tends to concentrate among business owners and investors.
2. Monopoly Power: In some cases, private sector firms may gain significant market power, leading to monopolies or oligopolies

3.Lack of Accountability.

Question 4

Public Sector

Answer 4

The public sector is a part of economy that is financed by the government through tax payers and is controlled by the government or its agents.

Question 5

Characteristics of public sector

Answer 5

1. Government Ownership and Control
2. Public Provision of Goods and Services:
3. Non-Profit Motive

4.Public Accountability and Transparency:

Question 6

Advantages and disadvantages of public sector

Answer 6

1. Universal Access:: Public sector services are often available to all members of society, regardless of their ability to pay.

2.Social Welfare:

3.Stability and Long-Term Planning:

Disadvantages of public sector

1.Bureaucracy and Inefficiency

2. Budget Constraints

3.Lack of Competition