Unit 2: Classification of businesses

Classification of businesses

Unit 2:

Different business sectors

• Primary Sector

• Secondary Sector

• Tertiary Sector

Primary Sector

Business activity involves extracting or harvesting natural resources from the land or sea.

Primary sector business activity often provides the raw material for secondary sector business activity.

Primary Sector

• Farming

• Fishing

• Forestry

• Mining

Secondary Sector

Business activity takes the natural resources produced by primary sector activity and turns the raw materials into finished goods.

Secondary Sector

• Refining

• Manufacturing

• Construction

Tertiary Sector

Business activity that involves providing services to the final consumers or businesses.

Tertiary Sector

• Shops

• Restaurants

• Banks

• Cinemas

• Airlines

Key Terms

• Chain of Production - the production and supply of goods to the final consumer involves activities from all 3 business sectors.

• Mixed Economy - an economy where the resources are owned and controlled by both the private and public sectors.

• Private Sector - the part of the economy that is owned and controlled by individuals and companies for profit.

• Public Sector - the part of the economy that is controlled by the state or government.

Importance of business classification

• Industrialisation: the growing importance of secondary sector business activity and the reduced importance of primarysector business activity.

• De-industrialisation: the growing importance of the tertiary sector and the reduced importance of the secondary sector.

Multiple Choice

A service is classified as a....

• Business provides goods to customers

• Business provides an activity that will benefit the customer

• Business that sells goods but as a service

Multiple Choice

Goods are defined as....

• Services provided to customers

• Anything that is tangible

• Things of value

Multiple Choice

Which of the following is a service?

• Retailer

• Hairdresser

• Trucking company

• Coal mine

Multiple Choice

Which of these business activities are usually NOT in the public (government) sector?

• grocery stores

• health

• defence

• public transport

Multiple Choice

Division of labour can be defined as:

• Workers specialise on just one task and become better at it.

• Workers become specialist in all jobs.

• All firms only have one worker

• No workers are employed as machines always do all the work.

Multiple Choice

Which of these is the best definition of the ‘economic problem’?

• People do not have enough money.

• There are not enough resources to satisfy people’s wants.

• There are too many factors of production.

• The amount of something produced by a person, machine or industry.

Multiple Choice

Organisations run by a central or local government are often referred to as

• Private sector

• Voluntary sector

• Public sector

• Mixed economy

Multiple Choice

Land, labour, capital and enterprise are collectively known as

• Goods and services

• Business cycle

• Factors of production

• Output

Multiple Choice

True or False: services are part of the tertiary business activity.

• True

• False

Multiple Choice

At which stage of business activity are the tables sold?

• Primary

• Secondary

• Tertiary

Multiple Choice

At which stage of business activity is wood made into tables?

• Primary

• Secondary

• Tertiary

Multiple Choice

At which stage of business activity are trees chopped down?

• Primary

• Secondary

• Tertiary

Multiple Choice

Which of the following is an example of a TERTIARY business activity?

• Schools

• Farmers

• Fishermen

• Factories

Multiple Choice

Which of the following is an example of a SECONDARY business activity?

• School

• Factories

• Shops

• Farmers

Multiple Choice

Which of the following is an example of a PRIMARY business activity?

• Factories

• Shops

• Schools

• Farmers

Multiple Choice

A possible reason for a change in consumer behavior as a result of both industrialisation & de-industrialisation.

• consumers have higher income & they demand better quality & wider choice of products.

• the need for finance to fund expansion so that business can compete in global markets.

• the need to be able to communicate internally & externally quickly & as cheaply as possible to take advantage of the opportunities of the wider markets.

• the need to provide better service for employees , thus this increases business demand for the goods & services of the other businesses.

Multiple Choice

the part of the economy that is controlled by the state or government.

• public sector

• private sector

• mixed economies

• market economies

Multiple Choice

the part of the economy that is owned & controlled by individuals & companies for profit.

• private sector

• public sector

• mixed sector

• market sector

Multiple Choice

an economy where the resources are owned & controlled by both the private & public.

• mixed economy

• market economy

• public economy

• command economy

Multiple Choice

This happens due to the growing importance of the tertiary sector & the reduced importance of the secondary sector.

• de-industrialisation

• industrialisation

• primary

• secondary

Multiple Choice

In a mixed economy which of these industries is most likely to be controlled by the government?

• Hotels and restaurants

• Building and taxi services

• Health and public transport

• Food shops and farming