1.2 Classification of business
Cambridge IGCSE Business Studies 1.2 – Classification of businesses
1.2.1
Economic Sectors
- Primary Sector – Extracts and uses the natural resources from the earth. e.g. Fishing, farming
- Secondary Sector – Manufacture goods using raw materials from primary sector. e.g. Car manufacturers and other factories
- Tertiary Sector – Provides service to consumers and other sectors of the industry e.g. Restaurants, car showroom, travel agent
Importance of economic sector
- The sector with the most workers is the most important in a country.
or
- The sector with most valuable goods/service is the most important in a country.
Changes in sector importance
- De-industrialisation – when manufacturing sector becomes less important in a country.
Why the importance of sectors changes?
- Primary sector resources get used up e.g. overfishing, deforestation.
- Factory costs (usually wages) are too high e.g. wages in China/India are cheaper
- People spend more on the tertiary sector as they become wealthier. e.g. more restaurants, travel agents
1.2.2
Mixed Economy
- Private Sector – Businesses not owned by the government but by private individuals. (Goal = Profit)
Advantages
High efficiency and lower costs
Competition is encouraged (prices will be lower)
Disadvantages
Some services may be closed (run out of money)
Workers may lose jobs to improve efficiency/cut cost (private sector business does not care about employment rates in countries)
- Public Sector – Government/State owned businesses. (Goal = non-profit, service for all citizens) e.g. Electricity, police, public transit
Advantages
Business is funded by government
Encourage more jobs
Disadvantages
Low efficiency
No competition between businesses
good notes! could make em more longer though.
shhh….the shorter, the better it is at being able to understand
facto G
these are just too out of syllabus for me!
Maza aagya, madat kardi tumne hamari
this is helpful but may i please do some practice
Hi could I have a pdf copy of the notes? They are very helpful