Unit 2

Question 1

What are the sectors of business?

Answer 1

1) Primary sector
2) Secondary sector
3) Tertiary sector

Question 2

Define chain of prodcution

Answer 2

The production and supply of goods to the final consumer involves activity from primary, secondary and tertiary sector is known as chain of production.

Question 3

Types of business in a mixed economy.

Answer 3

1) Public sector.
2) Private sector.

Question 4

Types of public sector businesses

Answer 4

Nationalized industries.
Government.
Public corporations.

Question 5

Public sector businesses characteristics

Answer 5

1. Decisions made for welfare, not profit.
2. Responsible for production of electricity, education and health care etc.
3. Some goods and services are often provided at a less price or free of charge for those less fortunate.
4. The decisions are made by the government.

Question 6

Define: Private sector

Answer 6

Made by individuals or groups of individuals and controlled by them. It’s main objective is profit.

Question 7

Define: Public sector

Answer 7

Made by the government For the service of the citizens of the country.

Question 8

Types of private sector businesses:

Answer 8

1) Sole traders.
2) Partnerships.
3) Limited companies.
4) Franchises, joint ventures and social enterprise.

Question 9

Decisions made by private sector businesses.

Answer 9

1. 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.
2. Businesses make sure the products can be sold for the lowest price possible to make profit and make more sales.
3. Businesses only produce if the sales can make a profit.
4. 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.

Question 10

What is a Primary sector business

Answer 10

Primary sector takes natural resources from the land or sea

Question 11

What is a Secondary sector business

Answer 11

Secondary sector takes the raw materials from primary sector and turns them into natural resources.

Question 12

What is a Tertiary sector business

Answer 12

This sector provides services to final consumers or businesses.

Question 13

How are countries often catogorized?

Answer 13

Countries are often described as developed or developing.

Question 14

What is a developing country?

Answer 14

small industrial sector and lower standard of living compared to other countries.

Question 15

What is another name for a developing country?

Answer 15

less developed country (LDC)

Question 16

What is another name for less developed country (LDC)?

Answer 16

developing country.

Question 17

What is a less developed country (LDC)?

Answer 17

small industrial sector and lower standard of living compared to other countries.

Question 18

What is a more developed country (MDC)?

Answer 18

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.

Question 19

What is another name for more developed country (MDC)?

Answer 19

Developed country.

Question 20

What is a developed country?

Answer 20

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.

Question 21

What is another name for developed country?

Answer 21

More developed country (MDC)

Question 22

What indicates if the country is developing or developed?

Answer 22

That classification of business activity by sector.

Question 23

What are the reasons behind change in consumer behavior?

Answer 23

1) Higher income
2) Better education
3) More leisure time

Question 24

Why does consumer behavior change due to Higher income?

Answer 24

Consumers demand better quality and wider choice of products.

Question 25

Why does consumer behavior change due to More leisure time?

Answer 25

Consumers have more leisure time than before. This means the demand for leisure activities such as: cinemas, restaurants etc. has increased.

Question 26

Reasons for changing business classification:

Answer 26

1) Industrialization. 2) De-industrialization.

Question 27

Why does consumer behavior change due to Better education?

Answer 27

Consumers expect better quality knowing they can buy goods from different suppliers from all over the world using e-commerce.

Question 28

How does the country's business classification change due to: De-industrialization?

Answer 28

The growing importance of the tertiary sector and the reduced importance of secondary sector.

Question 29

How does the country's business classification change due to: Industrialization?

Answer 29

The growing importance of secondary sector business and decreasing importance of primary sector business.

Question 30

Reasons for change in business behavior:

Answer 30

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.