Understanding Business

Question 1

What is the primary sector ?

Answer 1

•Extracting the natural resources such as farming, mining, fishing oil.

Question 2

What is the secondary sector?

Answer 2

•Manufacturing and constructing the resources into products, e.g ( car manufacture, building firms)

Question 3

What is the tertiary sector ?

Answer 3

The service sector.
• providing services such as banking and tourism.
•(e.g, healthcare, teaching, transportation)

Question 4

What is the quaternary sector?

Answer 4

The info sector .

•ICT, R&D, consultancy and app development, market research organisations, biotechnology.

Question 5

What are the sectors of economy?

Answer 5

• PRIVATE SECTOR
• THIRD SECTOR
• PUBLIC SECTOR

Question 6

How is the private sector run?

Answer 6

by private individuals

Question 7

What business are in the private sector ?

Answer 7

• Partnerships.
• Sole trader.
• Franchise.
• Private limited companies (LTD)
• Public limited companies (PLC)
• MNC

Question 8

What is the objective for a business in the private sector?

Answer 8

• To make a profit.

* survive and grow.

Question 9

What is the main objective for a business in the PUBLIC SECTOR?

Answer 9

• Provide a service.

* Make use of funds available

Question 10

How are businesses in the Public sector financed?

Answer 10

•by taxes payed by the public to provide essential services to local communities.

Question 11

Businesses in the public sector are owned and controlled by?

Answer 11

• the local government- Dundee council, schools, SQA.

* The central government- NHS, police , HMRC

Question 12

What is a sole trader?

Answer 12

• owned and controlled by one person.
• Owner makes all the decisions and keeps the profits but they have full responsibility of the business and unlimited liability.
• financed by owners savings.
• objectives = Maximise profits, grow and expand, survive.

Question 13

What is the third sector?

Answer 13

The non profit or voluntary sector.

It’s financed through donations.

It’s main objective is to raise awareness on the cause they support and to raise funds to help support these causes.

E.g Barnardos, wateraid

Question 14

What is a partnership?

Answer 14

• owned and controlled by 2-20 people. Partnership agreement should be created stating share of the profit, holidays, responsibilities and procedure if the partner dies or leaves.
• Financed by partners savings
• have unlimited liability.
• objectives are to maximise profits, grow, survive and expand

Question 15

What is a private limited company?

Answer 15

• Owned by a minimum of 2 shareholders.
• controlled by a board of directors.
• financed by shareholder investments, new share holders, issuing more shares, retained profits.
• objectives are too maximum profits, maximise sales, survive and grow.

Question 16

What is a public limited company?

Answer 16

• Owned by a minimum of 2 shareholders.
• Controlled by a board of directors.
• Minimum £50000 share capital.
• financed by shareholders.
• objectives are to maximise profits, sales, grow and market dominance.

Question 17

Advantages of PLCs?

Answer 17

• Access to more capital than private limited companies.
• company does not for if the owners die.
• employs specialists.
• can dominate market due to their size.

Question 18

Disadvantages of PLCs

Answer 18

• Formation expensive (legal & admin costs)
• may become too large too manage effectively.
• Have no control over who purchases shares on the market (could be a competitor)
• Decisions are more difficult to arrive at and can take along time to get agreement.

Question 19

LTD examples?

Answer 19

• New look
• Waitrose LTD
• House of Fraser

Question 20

PLC examples

Answer 20

• Tesco
• Thorntons
• Manchester United FC