Unit 1 outcome 1.1 - sectors of Industry

Question 1

What are the 4 sectors of industry?

Answer 1

• Primary
• Secondary
• Tertiary
• Quaternary

Question 2

What is a primary sector?

Answer 2

Taking natural resources from the land/sea; agricultural and extractive industries such as coal mining.

Question 3

What is a secondary sector?

Answer 3

Businesses which use resources to make or build their products; manufacturing and construction firms

Question 4

What is a tertiary sector?

Answer 4

Is made up of all firms which provide services and goods are exchanged (e.g Shops)
Don’t produce goods!!

Question 5

Give some examples of activities in the tertiary sector:

Answer 5

• Banking

- Hairdressing

Question 6

What is a quaternary sector?

Answer 6

A way to describe the knowledge based part of the economy

Question 7

Examples of quaternary sectors;

Answer 7

services such as information generation and sharing, information technology, consultation, education, research and development, financial planning and other knowledge-based services.

Question 8

What is a private sector?

Answer 8

organisations owned and controlled by private individuals and investors

Question 9

What is a public sector?

Answer 9

organisations owned and controlled by the government

Question 10

What is a third sector?

Answer 10

organisations set up to raise money for good causes or to provide facilities for their members.
Includes social enterprises and clubs

Question 11

What is the ownership of the private sector?

Answer 11

Private individuals known as Shareholders

Question 12

What is the control of the private sector?

Answer 12

Board of Directors - appointed by shareholders at an AGM

Question 13

What is the finance of the private sector?

Answer 13

Share capital

Question 14

What is the ownership of public sector?

Answer 14

Government

Question 15

What is the control of the public sector?

Answer 15

Board of directors/trustees - appointed by the government

Question 16

What is the finance of the public sector?

Answer 16

Taxations

Question 17

What is the ownership of the third sector?

Answer 17

Set up by a trust

Question 18

What is the control of the third sector?

Answer 18

Board of trustees, paid managers and volunteers

Question 19

What is the finance of the third sector?

Answer 19

Donations/Fundraising and membership subscriptions

Question 20

What are the 4 different types pf private-sector organisations?

Answer 20

• private limited companies
• public limited companies
• franchise
• multi-national

Question 21

What is a private-limited company?

Answer 21

• LTD
• cannot sell shares on the stock exchange
• owned by private shareholders, who must be invited to invest in the company
• Limited liability
• Run by a board of directors

Question 22

What is a Dividend?

Answer 22

when shareholders receive a share of the profits

Question 23

What is limited liability?

Answer 23

shareholders do not risk personal bankruptcy in the event of business failure.

Question 24

Name 3 advantages of a Private limited company:

Answer 24

• shareholders have limited liability
• Shareholders are private therefore the business doesn’t risk losing control of the organisation to outsiders
• The number of shareholders is small so the business usually retains a tight-knit, friendly culture

Question 25

Name 3 disadvantaged of a private limited company:

Answer 25

- profits have to be shared amongst shareholders - the legal process to set up the company is lengthy and complicated - as shares cannot be sold on the stock exchange, the amount of finance which can be raised is limited, also meaning the business doesn't have a large potential for growth.

Question 26

What is a public limited company?

Answer 26

- PLC - owned by shareholders - shares can be bought by the general public on the stock exchange - limited liability - run by board of directors

Question 27

What must Public limited companies publish and why?

Answer 27

They must publish their annual accounts and annual reports because this provides shareholders with useful information about how well the business is performing using the money they have invested

Question 28

What are 3 advantages of a public limited company?

Answer 28

- Shareholders have limited liability - large amounts of finance can be raised since shares can be sold on the stock exchange - Due to the large number of shareholders, PLCs can grow very quickly and dominate the market

Question 29

What are 3 disadvantages of a Public limited company?

Answer 29

- Profits have to be shared amongst a large number of shareholders - There is no control over who purchases shares - The legal process to set up the company is lengthy, complicated and expensive

Question 30

What is a multi-national corporation?

Answer 30

A business able to expand globally and operate on an international scale.

Question 31

What makes it easier to operate as a multinational corporate?

Answer 31

- Improvements in infrastructure - common currencies - growth of e-commerce

Question 32

What are 3 advantages of a multinational corporate?

Answer 32

- wages and raw materials costs can be lower overseas - businesses can avoid legislation in their home country e.g National minimum wage - Grants can be issued by another country to encourage large businesses to locate there

Question 33

Name 3 disadvantages of a multinational corporate?

Answer 33

- Cultural differences can affect production - exchange rates can increase costs - Time differences can hinder communication

Question 34

What is a Franchise?

Answer 34

a business run by one firm under the name of another

Question 35

What are 2 advantages of a Franchiser?

Answer 35

- it is a quick way to enter new geographical markets and increase market share - The franchiser will earn a percentage of the franchisee's profits each year (knows as royalties)

Question 36

What are 2 disadvantages of a Franchiser?

Answer 36

- they are reliant on franchisees to maintain the image and "good name" of the business - only a share of profits is received, rather than all the profits if the business owned each branch themselves

Question 37

What are 2 advantages of a Franchisee?

Answer 37

- The new business can begin trading on the established reputation of the franchiser immediately - The franchisee benefits from national advertisements carried out by the franchiser

Question 38

What are 2 disadvantages of a Franchisee?

Answer 38

- A percentage of the profits (royalties) has to be paid to the franchiser - The franchiser may impose strict rules on the franchisees and restrict their ability to operate

Question 39

What is the main aim of a organisation in the public sector?

Answer 39

To provide services for the general public

Question 40

Who are public-sector organisations run by?

Answer 40

The government

Question 41

What are the 3 separate areas in a public sector organisation?`

Answer 41

- Central government - Local government - Public government