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    Chapter 2 (Classification of Business)

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    yiew

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    Chapter 2 (Classification of Business)

    Uploaded by

    yiew
    13 views3 pages

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    chapter 2 (classification of business)

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    13 views3 pages

    Chapter 2 (Classification of Business)

    Uploaded by

    yiew

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Chapter 2: (classification of business) Case Studies

    Case Study 1:

    Jo owns a small shop selling takeaway meals in country P, which has a mixed

    economy. The shop is called ‘Best Foods’. She buys in food supplies such as pies

    and soups from Foodsure, a food processing business. Most of the meat and

    vegetables used by Foodsure are supplied by local farmers. They transport their

    produce to Foodsure and other food-processing businesses on the rail system,

    which is owned and controlled by the state in country P. Foodsure was recently

    sold by the government as part of its privatisation programme so it is no longer

    in the public sector.

    a) Define ‘mixed economy’. [2 marks]

    b) Define ‘public sector’. [2 marks]

    c) Outline, for any two businesses in the case study above, which sector of

    business activity they operate in. [4 marks]

    d) Explain two possible reasons why the secondary sector is declining in

    importance in country P. [6 marks]

    e) Do you think that shops should be in the private sector or public sector of

    the economy? Justify your answer. [6 marks]

    1
    Chapter 2: (classification of business) Case Studies

    Case Study 2:

    Ade’s Engineering Company (AEC) makes parts for cars and trucks. These are sold

    to car manufacturers in many countries. The parts include metal brake

    components and rubber seals to fit around windows. AEC operates in Country X,

    which, until a few years ago, had an economy dominated by agriculture and coal

    mining. Over the last 20 years the relative importance of the primary sector has

    declined. To be successful, AEC requires natural resources to make car parts and

    services provided by other businesses. Consumer incomes are rising rapidly in

    Country X.

    a) Define ‘primary sector’. [2 marks]

    b) Identify two examples of services that a business such as AEC requires.

    [2 marks]

    c) Outline two reasons why a business such as AEC could not be successful

    without other firms providing natural resources. [4 marks]

    d) Explain two likely reasons why the relative importance of the primary

    sector of Country X’s economy has declined. [6 marks]

    e) A government minister in Country X recently said: ‘The secondary sector

    of industry will always be more important than the tertiary sector to our

    economy’. Do you agree with this view? Justify your answer. [6 marks]

    2
    Chapter 2: (classification of business) Case Studies

    Case Study 3:

    The government of Country Y owns and controls many businesses. ‘The public

    sector always produces goods and services more efficiently than privately own

    businesses,’ a government minister recently said. Other ministers disagree and

    want to privatise many state-owned businesses. The private sector businesses in

    Country Y produce 55 per cent of total output – mainly in services such as

    transport, tourism and finance. The secondary sector of industry produces 35 per

    cent of total output.

    a) Define ‘public sector.’ [2 marks]

    b) Identify two industries in the secondary sector. [2 marks]

    c) Outline two reasons why the tertiary sector of industry is becoming more

    important in most economies. [4 marks]

    d) Explain two possible reasons why some ministers want to privatise some

    businesses in the public sector. [6 marks]

    e) Do you agree with the government minister’s view that: ‘The public sector

    always produces goods and services more efficiently than privately owned

    businesses’? Justify your answer. [6 marks]

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