understanding

Question 1

the business cycle

Answer 1

1)business produce goods and services to meet needs and wants of customers

2)customers buy goods and services to satisfy their wants

3)wealth created for business (income), employees (wages), and shareholders (dividend)

4)income, wages, and dividend are spent buying more goods and services

Question 2

sectors of industry (recap)

Answer 2

-primary sector, all extractive industries eg farming, fishing, and forestry that provide the raw materials used in production

-secondary sector, processing industries involving the changing of raw materials into a physical good via manufacturing or construction

-tertiary sector, all service providers so covers both direct (to general public) or commercial (for businesses)

Question 3

sectors of industry

Answer 3

-primary, secondary, tertiary

-quaternary sector, the part of the economy with industries based on knowledge
>developed from the tertiary sector as it involves services but it is a more specialised group of services
>found in well developed, post industrial countries
>needs a highly educated workforce as tasks are higher order so education and training is important
>higher profit margins as costs relatively low but revenue high
>brings a competitive edge
>eg computing and ICT, education, consultancy

Question 4

types of organisations

Answer 4

-public sector organisations(national government, owned by the state and controlled by the government, paid managers and civil servants carry out day to day decisions, finance from income/VAT taxes, govt grants, charges and business rates, limited liability, profits improve services

-third/voluntary sector, set up as a trust, controlled by trustees and paid managers, funded by donations, business sponsorship, revenue and grant, limited liability, scottish charity regulator oversees all, not for profit (surplus used)

PRIVATE SECTOR
>OWNED AND CONTROLLED BY PRIVATE INDIVIDUALS

-private limited company, owned by 2-50 shareholders and paid managers, finances sourced by shared equity, 3rd party investment, retained profits and trade credit (finance easier to raise as well known), limited liability, complex paperwork must be published, shareholders get dividend and bonus

-public limited company, owned by shareholders(unlimited) and controlled by paid directors and expert managers(skilled), finance sourced by shared equity, 3rd party investment, retained profits and trade credit (easy to raise), limited liability, complex regulations as specific paperwork must be published and must run and AGM, shareholders get dividend and bonus