The Mixed Economy Flashcards
its like an economy thats mixed (16 cards)
Private sector
The provision of goods and services by businesses owned by individuals/ groups
Public Sector
government organisations that provide or fund provision of goods and services in the economy.
What are the 3 types of private sector organisation
-> Sole traders
-> Partnership
-> Companies
What is a sole trader?
Businesses owned and controlled by 1 person
What is a partnership?
Businesses owned and controlled by 2 or more people working together
What is a company
Where shareholder own the business
What is a Mixed Economy
An economy where goods and services are provided by both the private and public sector
What are the Aims for a private sector business
-> Survival -> When starting up a new business, firms will aim to survive due to unexpected difficulties
-> Profit Maximisation
-> Growth -> Growing the firms to achieve EOS
-> Social Responsibility -> Aiming to please a wide range of stakeholder
Aims for a public sector business?
-> Improving the quality of services
-> Minimising costs
Non Excludability
once a good has been provided, you cannot take it away
Non rivalrous
where even if one person is using the good, other can also use it at the same time
What is the free rider problem?
People who benefit from things they do NOT contribute on
e.g Kavithan Logeswaran yh
What is privatisation.
The act of selling a company controlled by the government to a private sector
What is contracting out
When government gives the private sector a chance to win contracts to provide services previously supplied by public sector.
Why do firms want to privatise?
-To maximise profit
Why does privatisation take place?
To generate income/ raise revenue
To reduce political interference
I-> Firms have power over business
and can make own decisions
Encourage new firms to enter the marker
