Ch. 2: Classification of Business

The primary stage of production is concerned with

• growing crops and extracting the earth's natural resources
• providing services to consumers and industry
• converting raw materials into finished goods
• transporting goods to the final consumer

The tertiary sector of industry is the most important sector in high income countries because

• agricultural output is more important than services
• they use most of their income to buy manufactured goods
• workers are employed in manufacturing in these countries
• consumers' incomes are high so they spend more on services

Which following businesses would you classify as being in the secondary sector of industry?

• An oil exploration company
• A family run farm business
• A taxi operating business
• A shoe manufacturer

Which of the following is the best definition of privatisation?

• When private limited companies convert into public companies
• When a partnership converts into a private limited company
• When a state owned industry is sold to the private sector
• When a private sector firm is purchased by the government

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

• Hotels and restaurants
• Health and public transport
• Building and taxi services
• Food shops and farming

Which one of the following is a disadvantage of privatisation?

• Jobs might be lost as private owners try to cut costs
• The government raises money which could help to reduce taxes
• Less competition than when the industry was a monopoly
• Politicians will now influence business decisions

Changes in importance of different sectors of industry in a country is likely to be caused by

• the exhaustion of the country's copper mines
• an increase in the country's population
• a long period of no increases in family incomes
• government grants available to businesses in all sectors