Topic 6 Business Sectors Flashcards
Meaning of primary , secondary and tertiary sectors
Business sectors consist of businesses Grouped together.
How the business is classified depends on nature of its product or service.
Primary sector meaning
Business extract , collect , cultivate raw materials and natural resources.
Primary sector examples
Fishing
Forestry
Mining
Secondary sector meaning
Transform raw materials from primary sector into finished or semi finished products.
Secondary sector examples
Factories
Electricity
Construction
Tertiary sector meaning
Exsist to facilitate the transport distribution and sale of good produced in the secondary sector
Tertiary sector examples
Tourism
Financing
Storage
Relationship between the sectors
Sectors work together to create economic chain of production. Primary gathers raw materials . Secondary manufactures raw materials into useful goods . Tertiary sells the goods and services .
Difference
formal sector:
Controlled by laws and regulations of government.
Activities monitored by government
Difference
Informal sector :
Businesses not monitored by the government.
Employees are not protected by any legislation and can easily be exploited
Meaning of formal sector
Registered and pay taxes. These businesses are requires to reguster with companies and Intellectual Property Commission.
Meaning of informal sector
Workers are self employed. Owners take responsibility for success and failure
Importance of formal sector
Business activities are included in GDP figures of the country.
Companies pay taxes on their profits.
Provides large variety of goods and services to satisfy customers.
Importance of informal sector
Encourages entrepreneurship and self employment.
It’s easy to enter this sector and serves the needs of individuals.
People start informal businesses to supplement their income iearned in the formal sector.
Meaning of public sector
It does not include private companies , voluntary organisations and households
Meaning of the private sector
Some of these businesses exsisit in the formal sector or informal sector
Purpose of the public sector
Improves the general standard of living of a it’s citizens.
Ensures = distribution of wealth.
Provides various kinds of job opportunities.
Intervenes in the economy to limit anti competitive behavior.
Purpose of private sector
Provide businesses with the opportunity to create wealth 4 growth.
Provide employment and contributes to tax revenues.
Support public sector woth public private partnership agreement
Differences.
Public sector
Provide public goods and services such as water and electricity to meet people’s needs.
Tasked with improving the general standard of all living citizens.
Companies should ensure equal distribution of wealth among rich and poor.
Differences
Private sector
Provide opportunities for other businesses to create wealth for growth.
Also support the public sector through public private partnership agreements.
Offer large variety of goods and services to meet demands of consumers
