topic 1 - role of business in society

Question 1

why do businesses exist?

Answer 1

businesses exist primarily to satisfy the needs and wants of customers.

Question 2

describe needs

Answer 2

needs are essential to survive (e.g. food, water, shelter.)

Question 3

describe wants

Answer 3

wants are everything else (e.g. designer clothing, transport, holidays and even Wi-Fi and smartphones.)

Question 4

describe the primary sector

Answer 4

this consists of businesses that are involved in exploiting natural resources. Examples include farming, mining and oil drilling.

Question 5

describe the secondary sector

Answer 5

this consists of businesses that are involved in manufacturing and construction, by taking natural resources and turning them into goods which can be sold later. Examples include electronics manufacture, car production and house building.

Question 6

describe the tertiary sector

Answer 6

this consists of businesses and organisations that are involved in providing services rather than goods. Examples include retail outlets, banks, hotels and hospitals.

Question 7

describe the quaternary sector

Answer 7

this consists of businesses providing information and knowledge-based services, such as:
- ICT (information and communication technology.
- consultancy (offering advice to businesses).
- R&D (research and development).

Question 8

describe adding value

Answer 8

businesses will add value to products as they move through different sectors of industry. For example, a denim jeans manufacturer (secondary sector) will take raw materials such as cotton that they paid £1 for and turn them into a pair of jeans that they can then sell on for £20. This would represent £19 in added value.

Question 9

describe the private sector

Answer 9

this consists of businesses that aim primarily to maximise profits and includes all profit-making businesses ranging from your local high-street bakery to huge multinational companies such as Ford and Samsung.

Question 10

describe the public sector

Answer 10

this consists of government-owned organisations and agencies which aim to provide a service to society. This sector of economy includes the NHS, police and state education.

Question 11

describe the third sector

Answer 11

this consists of organisations that have been set up to provide goods or services to benefit others. This sector of economy includes:
- charities such as Cancer research and the SSPCA.
- voluntary organisations such as golf clubs and scouts groups.
- social enterprises
- democratic enterprises such as co-operatives.