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classification of business/stages of economic activity

primary sector of industry extracts and uses natural resources of the earth to produce raw materials used by other businesses.

secondary sector manufactures goods using the raw materials provided by the primary sector.

tertiary sector of industry provides services to consumers and the other sectors of industry.

examples of activities include banking, retail, insurance,hotel and hairdressing.

relative importance of economic sectors

percentage of the country's total number of workers employed in each sector.

value of output of goods and services and the proportion this is of total national output.

change in sector importance

in the uk the relative importance of secondary or manufacturing industry has lost its importance as a result of more people being employed into the tertiary sector this also means that less people get to work in factories due to an increase in employment of the tertiary sector.

mixed economy

a mixed economy has both a private sector and a public sector.

nearly every country has a mixed economy which means that they both have a private sector and a public sector

what is a private sector? are businesses not owned by the government.

what is a public sector?public sectors are businesses owned and controlled by the government.

which business activities are usually in the public sector? health,education, defense,public transport,water supply,electricity supply

mixed economies-recent changes

government around the world have disturbed the balance between private sectors and public sectors they have done this by selling some public sector businesses to private sector businesses this is known as privatisation.

what is privatisation? privatisation is the process where companies sell public sector businesses to private sector businesses.

why do governments do this? it is often said that private sector businesses are often more efficient than public sector businesses why? because private businesses have a different motive/ objective which is to make profit.

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chapter 2 continued

it is often claimed that private sector businesses are more efficient than public sector businesses this is true because private sector businesses main objective is to make profit and the

therefore costs must be controlled

private sector owners might invest more capital into the business than the government can afford, however a downfall of private sector businesses as compared to public sector businesses is that businesses can become less likely to focus on social objectives.

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chapter 3-