Sectors of economy

Question 1

private sector

Answer 1

owned and payed for by individuals or stakeholder

Question 2

public sector

Answer 2

owned by the government, payed by taxpayers money

Question 3

third

Answer 3

charity, paid for by donations

Question 4

private sector aims to …

Answer 4

• maximise profits
• to turn innovative ideas into successful businesses
• to expand the business

Question 5

public sector aims to …

Answer 5

• provide a high quality service to everyone in the country

- to make good use of tax payers money and provide services needed

Question 6

The voluntary sector aims to …

Answer 6

• provide support to worthy causes
• to promote awareness of ‘good’ causes
• to provide the best quality of service possible

Question 7

examples of public sector organisations (name as many as possible)

Answer 7

• police
• local authorities
• hospitals
• fire brigade
• army
• BBC
• schools

Question 8

private sector organisations …

Answer 8

• sole traders
• partnerships (2-20)
• private limited companies (LTD)
• public limited companies (PLC)

Question 9

info on private sector organisations

Answer 9

• owned and run by private individuals
• provide a good or service for consumers to purchase
• basic aim is to make a profit

Question 10

info on public sector organisations

Answer 10

• owned and controlled by local or central government
• main aim is to provide services thought desirable for the public
• main aim is to meet local / national needs

Question 11

info on public corporations

Answer 11

• run by government
• feed charger for use of services
• set up by act of parliament
• government appointed chair person
• finance obtained by annual grants

Question 12

info on local authorities

Answer 12

• controlled by elected counsellors
• run by civil services
• fees paid for use of services
• finance obtained by annual grants from central government, council tax and fees

Question 13

info on charities

Answer 13

• do not aim to make profit
• ‘owned’ by donors
• have to be registered with the charity commission

Question 14

info on social enterprises

Answer 14

• trade to tackle social problems
• makes money from goods / services sold in open market
• when they profit, society benefits
• have social / environmental aims
• demonstrate social value
• at least 50% of profits goes to social / environmental aims

Question 15

sole trader advantages

Answer 15

• quite easy and cheap to set up
• the owner makes all the decisions
• the owner keeps all profits

Question 16

sole trader disadvantages

Answer 16

• harder to get loans from banks
• unlimited liability
• long working hours with few holidays
• sole responsibility
• problems if owner falls ill

Question 17

partnership advantages

Answer 17

• work load can be shared
• partners will specialise in different areas
• more money can be invested in business

Question 18

partnership disadvantages

Answer 18

• unlimited liability
• arguments may occur
• profits must be shared
• partners may leave, upsetting the running of the business

Question 19

why bring in more partners?

Answer 19

• expertise
• ideas
• capital investment

Question 20

public limited company (PLC)

Answer 20

• a company whose shares are available for purchase by the public on the stock market
• minimum of 2 shareholders

Question 21

private limited company (LTD)

Answer 21

• a company whose shares are owned privately
• shares are not available to the public on the stock market
• minimum of 1 shareholder

Question 22

what do PLC’s and LTD’s have in common?

Answer 22

• owned by the shareholders
• controlled by a board of directors
• must produce a memorandum and articles of associations