Business Structure

Which one of the following statements is most likely to be correct?

• Primary sector activity includes food packing and freezing businesses

• Tertiary sector activity includes small scale farming operations

• Secondary sector activity includes using materials such as wood, clay bricks and sand to construct a house

• The secondary sector is gaining in importance compared to the tertiary sector in most high income developed countries

A typical example of public sector organisations is:

• fee paying schools

• army

• public limited companies

• sports clubs open to the public

Which of the following is not a reason for a sole trader taking partners into the business?

• To increase the capital available for expansion

• To gain limited liability for all owners

• To increase the expertise available to the business

• To share management functions

One of the reasons why some private limited companies convert to public limited company status is:

• to gain limited liability for all shareholders

• to avoid having to disclose important accounting results

• to share the management tasks with other shareholders

• to obtain finance for expansion which has no interest charges

A potential benefit of a cooperative organisation is:

• the shareholders will be able to keep all of the profit

• customers will always benefit from lower prices compared to other private sector businesses

• the members tend to be highly motivated as they will benefit from any surplus made

• as they are state owned and controlled the workers can never lose their jobs

Privatisation of a state owned business is likely to lead to which one of the following?

• Increased job opportunities as the new owners will want to reduce unemployment

• Cost cutting decisions by managers as the profit incentive will be strong

• Lower prices to help consumers on low incomes

• Increased government spending to invest in new factories for the business

Which one is NOT positive impact of multinationals?

• Local jobs created

• National output increases

• Less cultural diversity

• Skils of local workers increased

Businesses with headquarters in one country but with opening branches or factories in other countries is called....

• Secondary sector company

• Public company

• Private co company

• Multinational company

The reason public company become private company

• business operates with politic control

• raises finance for government

• Financial support only from government

• Might lead to monopoly

The recent growth of multinational companies can be explained by:

• High cost saving in home country

• increased free trade and reduction in barriers makes it easier for businesses to start up operations in other countries

• Difficult access to local resources

• The business foreign operations far from the important markets