Sectors of Business Activity
Extracting and harvesting natural resources.
Primary sector.
The part of the economy owned and controlled by government.
Public sector.
“Value of all assets used by the business” is which size measure?
Value of capital employed.
“Reduction in average cost as output increases” is called what?
Economies of scale.
Rising average costs due to poor coordination/communication in a bigger firm.
Diseconomies of scale.
Processing raw materials into finished goods.
Secondary sector.
An economy where resources are owned by both government and private firms.
Mixed economy.
The measure based on revenue from goods/services sold.
Value of output.
Expanding by opening new shops/factories is what type of growth?
Internal (organic) growth.
After a merger, different management styles and pay systems can cause what issue?
Culture clashes/conflict.
Providing services to consumers or businesses (e.g., airlines, schools).
Tertiary sector.
One core objective of public corporations (beyond profit).
Social objectives (accessibility/affordability).
One limitation of using “number of employees” as a size measure.
Automation/part-time staff/human-capital differences can distort comparisons.
Buying ≥51% of another company’s shares (with consent) is called…
An acquisition (external growth).
One reason some owners choose to remain small (name any).
Keep control / close customer relationships / avoid big-firm workload.
IT, R&D, and information services are in which sector sometimes grouped with tertiary?
Quaternary sector.
Main revenue source for public corporations.
Taxation.
Why can market share be misleading as a sole size indicator?
Ignores total market value (small market with big share vs big market with small share).
Two banks merge. Identify the integration type.
Horizontal integration.
Name one external reason small firms may struggle to grow.
Market dominated by large firms; limited access to finance; small local market.
Name the term for primary→secondary→tertiary working together to deliver goods to the final consumer.
Chain of production.
In the private sector, name two typical business objectives.
Survival, profit, growth, or increasing market share.
What’s the safest approach when deciding whether a business is big or small?
Use multiple measures, not just one.
A shoe producer buys a leather supplier. Identify the integration type.
Backward vertical integration.
Give two common reasons businesses fail that relate to money management.
Lack of finance and liquidity/cash-flow problems.