IB-B&M-U1-Types of organization

Choose one option. Which one is the definition of public sector?

• The portion of an economy not owned or directed by the government

• It refers to the portion of the economy controlled or owned by the government

• It is the economic activity of producing a finished good

• It is a section of an economy that extracts material or harvests products from the earth

• The service sector of the economy

Answer explanation

Chose options that ARE NOT features of private sector:

• In many countries, they cover activities such as the state health, education, police, and prison services

• Covers activities that are within the control or direction of governments

• Includes “public and private” limited companies

• “Public” means that the shares are traded on a stock market and available to any

  members of the public to buy and sell.

• Organizations owned and managed by individuals.

Features of public sector:

• In many countries, they cover activities such as the state health, education, police, and

  prison services

• Covers activities that are within the control or direction of governments

• Includes “public and private” limited companies

• They are solely accountable to the government for their performance

• Generally operate with the main objective of making profit

Definition of private sector

• The portion of an economy not owned or directed by the government

• It is the economic activity of producing a finished good

• The service sector of the economy

• It refers to the portion of the economy controlled or owned by the government

• It is a section of an economy that extracts material or harvests products from the earth

Definition of revenues:

• Costs incurred by the business in the same period of time

• The income received by the business in a specific period of time

Is this the formula for profit?:

"Profit = total revenues – total costs"

• False

• True

Which option IS NOT an example of for-profit organization?

• Sole traders or sole proprietors

• Partnerships

• Companies or corporations

• Government

Which option IS NOT an example of non-profit organization?

• Non-government organizations (NGO's)

• Cooperatives

• Limited Companies or corporations

Is the following statement true or false?

"Sole traders are usually considered as part of for-profit organizations. It refers to a business owned and run by one person. When a business operates as a sole trader, no legal distinction exists between the business and the owner ."

• True

• False

Which options are advantages of sole traders?

• Easy to set up the business

• Complete control

• Privacy

• Keep all the profit

• Personal service