2. Classification of Businesses Flashcards
List the levels of business activity
- Primary
- Secondary
- Tertiary
Define ‘Chain of Production’
The sequence of activities involving the conversion of raw materials into finished goods and selling them to the final consumer.
Define and give examples of primary sector activities
Extraction of raw materials from land and selling them as they are to be used by other businesses.
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Ex.
- Farming
- Mining
- Fishing or Hunting
- Woodcutting
- Extraction of natural resources (oil, natural gas..)
Define and give examples of secondary sector activities
Processing raw materials provided by the primary sector into finished goods.
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Ex.
- Baking
- Computer assembly
- Construction/Building
- Aircraft or car manufacturing
- Textile making
Define and give examples of tertiary sector activities
Providing services to consumers or other businesses.
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Ex.
- Transportation
- Shipping
- Hairdressing
- Banking
- Advertising
What is industrialisation?
Movement of a country from primary activities to secondary activities.
What is deindustrialisation?
Movement of a country from secondary activities to tertiary activities.
List 2 ways to know the dominant sector of a country
- Measuring and comparing the number of employees working in each sector.
- Measuring and comparing the value of the output of each sector
What is the difference between a developing country and a developed country?
Developing country:
- Have low incomes and a lower standard of living •
- Little demand for tertiary services like travel and insurance.
- Levels of employment and output in the primary sector is likely to be higher the the other 2 sectors.
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Developed country:
- High incomes and higher standard of living
- Citizens spend more of their income on services like travel, insurance, restaurants.
Why can there be a change in sector importance?
- Sources of some primary products (timber, oil, natural gas) become depleted
- Developed countries lose competitiveness in manufacturing to newly-industrialised countries (Brazil, India, and China)
- As a country’s total wealth and living standards increase, citizens change their focus to services more than products.
What is the difference between the ‘private sector’ and the ‘public sector’?
The private sector consists of businesses owned by private individuals.
The public sector consists of businesses owned by the government or other public authorities.
What is a mixed economy?
It is the economy of country containing both public sector businesses and private sector businesses.
Define ‘Privatisation
Transfer of ownership of a business from the public sector (the government) to the private sector (the private owners).
Define ‘Nationalisation’
Transfer of ownership of a business from the private sector (the private owners) to the public sector (the government).
How are prices in the private sector businesses chosen?
According to ‘Demand and Supply’
(Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demandrelationship. Supply represents how much the market can offer.)
