<1.2 BUSINESS CLASSIFICATIONS>

--1.2.1 CLASSIFICATION BY PRODUCTION STAGE--

--PRIMARY SECTOR--

Firms within the PRIMARY SECTOR are involved in activities related to the EXTRACTION OF NATURAL RESOURCES such as agriculture, fishing, forestry, mining, etc...

--SECONDARY SECTOR--

Firms within the SECONDARY SECTOR are involved in activities related to THE PROCESSING OF PRIMARY SECTOR GOODS into FINISHED or SEMI-FINISHED MANUFACTURED PRODUCTS such as Car-making, Textiles, Shipbuilding etc...

--TERTIARY SECTOR--

Firms within the TERTIARY SECTOR are involved in activities related to THE PROVISION OF SERVICES TO PRODUCERS AND CONSUMERS such as LEGAL, TRANSPORTATION and HOSPITALITY SERVICES as well as SALES SERVICES directly selling the goods created in the secondary sector, such as car showrooms, retailers, etc...

--CHANGING IMPORTANCE OF STAGES--

If we look at the 'distribution of GDP be economic sector in the US since 1839' and 'South Korea since 1911' below, we can see that as they develop, the SHARE OF GDP IN AGRICULTURE DECLINES, while the SHARE OF GDP IN SERVICES GOES UP; and in the middle, the relative IMPORTANCE OF THE MANUFACTURING SECTOR FIRST EXPANDS AND THEN CONTRACTS.
This is the general pattern exhibited by almost all developed nations and this is mainly attributable to CHANGING RELATIVE OPPORTUNITY COSTS (RELATIVE PRODUCTIVITIES), as a country becomes more productive at manufacturing relative to agriculture they will shift resources into that sector and so on...

--1.2.2 CLASSIFICATION BY OWNERSHIP--

-WHAT IS THE DIFFERENCE BETWEEN THE PRIVATE AND THE PUBLIC SECTOR?

-WHAT ARE THE REASONS FOR NATIONALISATION?

-WHAT ARE THE REASONS FOR PRIVATISATION?

--PRIVATE SECTOR--

The PRIVATE SECTOR refers to the section of the economy that is NOT CONTROLLED BY THE GOVERNMENT.
E.g OFS, Apple...

--PUBLIC SECTOR--

The PUBLIC SECTOR refers to the section of the economy that is CONTROLLED BY THE GOVERNMENT.
E.g Singpost, BBC...

--PRIVATISATION--

PRIVATISATION refers to the transfer of government owned assets to the private sector. It can also refer to the transition of a publicly traded company to becoming privately held.

--NATIONALISATION--

NATIONALIZATION refers to the process of a government taking control of a private sector, industry, or assets that are privately controlled.

RELATED PAST PAPER QUESTIONS

AUC Identify two examples of business activity in the tertiary sector. (2)

TRB TRB is in the secondary sector. Identify the other two classifications of business sector activity. (2)

KASPER What is meant by the ‘primary sector’? (2)

KASPER Calculate the number of people employed in secondary sector businesses in country Y. (2)

Udig What is meant by ‘private sector’? (2)

TODDLES What is meant by ‘tertiary sector’? (2)

(WA) Identify and explain two examples of tertiary sector businesses that help WA to be successful. (8) MODEL

(SC) Identify and explain two types of tertiary businesses which provide services that SC is likely to use. (8)

1.2.1_1.2.2.pdf

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