Unit 2 Flashcards
What are the sectors of business?
1) Primary sector
2) Secondary sector
3) Tertiary sector
Define chain of prodcution
The production and supply of goods to the final consumer involves activity from primary, secondary and tertiary sector is known as chain of production.
Types of business in a mixed economy.
1) Public sector.
2) Private sector.
Types of public sector businesses
Nationalized industries.
Government.
Public corporations.
Public sector businesses characteristics
- Decisions made for welfare, not profit.
- Responsible for production of electricity, education and health care etc.
- Some goods and services are often provided at a less price or free of charge for those less fortunate.
- The decisions are made by the government.
Define: Private sector
Made by individuals or groups of individuals and controlled by them. It’s main objective is profit.
Define: Public sector
Made by the government For the service of the citizens of the country.
Types of private sector businesses:
1) Sole traders.
2) Partnerships.
3) Limited companies.
4) Franchises, joint ventures and social enterprise.
Decisions made by private sector businesses.
- Consumers’ preferences always keep changing, this is why the business must make different decisions to ensure the preferences of consumers are met and more sales are made.
- Businesses make sure the products can be sold for the lowest price possible to make profit and make more sales.
- Businesses only produce if the sales can make a profit.
- The goods and services are only going to be received by people who have enough financial ability to do so. This means not everyone will be able to purchase the products as it is based on profit and not welfare.
What is a Primary sector business
Primary sector takes natural resources from the land or sea
What is a Secondary sector business
Secondary sector takes the raw materials from primary sector and turns them into natural resources.
What is a Tertiary sector business
This sector provides services to final consumers or businesses.
How are countries often catogorized?
Countries are often described as developed or developing.
What is a developing country?
small industrial sector and lower standard of living compared to other countries.
What is another name for a developing country?
less developed country (LDC)
What is another name for less developed country (LDC)?
developing country.
What is a less developed country (LDC)?
small industrial sector and lower standard of living compared to other countries.
What is a more developed country (MDC)?
A country that has high levels of industrialization and its people enjoy higher average incomes and a higher standard of living compared to less developed countries.
What is another name for more developed country (MDC)?
Developed country.
What is a developed country?
A country has high levels of industrialization and its people enjoy higher average incomes and a higher standard of living compared to less developed countries.
What is another name for developed country?
More developed country (MDC)
What indicates if the country is developing or developed?
That classification of business activity by sector.
What are the reasons behind change in consumer behavior?
1) Higher income
2) Better education
3) More leisure time
Why does consumer behavior change due to Higher income?
Consumers demand better quality and wider choice of products.
Why does consumer behavior change due to More leisure time?
Consumers have more leisure time than before. This means the demand for leisure activities such as: cinemas, restaurants etc. has increased.
Reasons for changing business classification:
1) Industrialization.
2) De-industrialization.
Why does consumer behavior change due to Better education?
Consumers expect better quality knowing they can buy goods from different suppliers from all over the world using
e-commerce.
How does the country’s business classification change due to: De-industrialization?
The growing importance of the tertiary sector and the reduced importance of secondary sector.
How does the country’s business classification change due to: Industrialization?
The growing importance of secondary sector business and decreasing importance of primary sector business.
Reasons for change in business behavior:
1) The need for finance to fund expansion so that the business can compete in global market.
2) The need to be able to communicate internally and externally quickly and as cheaply as possible.
3) The need to provide better services to employees such as: canteens; this in turn increases business demand for goods and services in other businesses.
