Private/Public Sector & Charities/social enterprise

Question 1

Outline a private sector business

Answer 1

Businesses set up by individuals in order to make a profit

Question 2

Outline public sector businesses

Answer 2

Businesses run by the government for the benefit of everyone (e.g hospitals)

Question 3

Outline 3 aims of private sector businesses

Answer 3

1. Survival
2. Profit maximisation
3. Competitiveness

Question 4

Outline 3 aims for public sector businesses

Answer 4

1. Universal services to all of UK
2. Provide services private sector doesn’t provide
3. Provision of public goods effective

Question 5

Define Public goods

Answer 5

Goods not provided in a free market system as a business can’t charge for them

Question 6

Outline the 2 characteristics of public goods

Answer 6

1. Non-rivalry - consumption of the good doesn’t decrease amount for others
2. Non-excludability - impossible to exclude others from benefitting from their use

Question 7

Define merit goods

Answer 7

Goods provided by free market but are under-consumed
Provided free of charge from the government (e.g health, libraries)

Question 8

Define Charities

Answer 8

Non-profit organisation
Aims to collect money to spend on a cause (e.g meet a narrow focus/problem to achieve)

Question 9

Define Social enterprises

Answer 9

Both for-profit and not-for-profit businesses with social objectives (trading for social and environmental purpose)
Profits reinvested to meet objective

Question 10

Outline an example of a social enterprise

Answer 10

Jamie Oliver’s 15

Question 11

Why do social enterprises need to make a profit? (3 reasons)

Answer 11

1. Survive, make profit, grow
2. Profits sustain their mission
3. Fulfil social and/or environmental goals

Question 12

Define a cooperative

Answer 12

Not-for-profit business that’s run by it’s members