GCSE Business Public Corporations

What is a public corporation?

• A business that belongs to the government

• A business that sells products to the public

• A cooperative

• A franchise

Which of the following services is MOST likely to be provided by a public corporation? [choose ONE]

• Housing

• Street lighting

• Fast food

• Schools

Why do public corporations often sell goods and services at low prices?

• They want to be competitive

• They can produce at very low cost

• They do not have many customers

• They do not have to make a profit

When the revenue of a public corporation is greater than its costs it is said to make a ......

• Profit

• Deficit

• Surplus

• Loss

When the government takes over an existing business it is called.....

• Nationalisation

• Privatisation

• Redistribution

• Communism

Which of the following are benefits of public corporations?

• Often they do not respond quickly to changes in what consumers want

• They can provide more jobs when unemployment increases

• They are often inefficient

• They can afford to invest in expensive but important projects, such as new roads and railways

Which of the following are disadvantages of public corporations?

• They may serve their employees better than their customers!

• They may have lots of administrators and be hard to manage

• They usually provide very important products or services

• Operating costs can be high

Why do governments sell public corporations to investors? [privatise them]

• To attract investment

• To increase government control

• To get more revenue

• To increase the number of government employees

Which of the following is an advantage of privatisation?

• Businesses may become more efficient

• Businesses may be taken over by foreigners

• Businesses may become more responsive to consumers

• Businesses are likely to increase prices

Supporters of market economies prefer privatisation to (a)