1.

Define the term public sector:

The public sector is all the parts of the economy that are run by the government. It includes things like
government agencies, public schools, and public hospitals etc.

2. Explain one potential effect for consumers of a large public sector:

When the public sector is big, it can mean more government control over things like prices and
services. This might lead to more stability, but sometimes it can limit choices for consumers.

3. Evaluate the possible impact for businesses in Cuba of having a more free market economy:

A more free market in Cuba can create opportunities for businesses, like those from the UK. It means
businesses can compete more freely, but they might also face challenges like slow decision-making
and lots of rules to follow. It's a mixed bag of opportunities and hurdles.
1. Define the term private sector:

The private sector means businesses that are owned and run by people or companies, not the
government.

2. Advantage and disadvantage for consumers in the private sector:

Advantage: You have more choices. You can choose from different brands and products.
Disadvantage: Prices might be higher because businesses want to make money.

3. Advantage and disadvantage for consumers in the public sector:

Advantage: It's often cheaper or even free. Government services like schools and healthcare
are available to everyone.
Disadvantage: You might have fewer options, and sometimes things might not improve or
change quickly.

4. Discuss the reasons why a government may move businesses out of the public sector and into the
private sector:
Governments may decide to move businesses from the public sector (which they own and manage) to
the private sector (owned and run by individuals or companies) for various reasons:
a. Cost Efficiency: They believe that private businesses can often operate more efficiently and
cost-effectively, reducing the financial burden on the government.
b. Encourage Competition: By allowing private companies to compete in certain industries,
governments can stimulate competition, which can lead to better products and services for
consumers.
c. Raise Funds: Selling state-owned assets to private investors can generate funds that can be
used for other important public needs, such as infrastructure or healthcare.
d. Expertise: Private companies might bring specialized skills and expertise that the government
lacks, improving the quality of services.
1. Define the term private sector company:
A private sector company is a business owned and operated by individuals or other companies, and it's
not owned by the government. Private companies are often focused on making profits.
2. Define the term publicly held company:
A publicly held company, also known as a public company, is a business whose ownership is divided
into shares that can be bought and sold by the public on a stock exchange. These companies are
usually listed on stock markets.
3. Explain two reasons why someone might want to be a shareholder of a company:
Potential for Profits: Shareholders can make money if the company does well. When the company
makes a profit, it may pay dividends to shareholders, or they can sell their shares at a higher price than
they bought them.
Ownership and Influence: Shareholders have a say in the company's decisions and can vote on
important matters. This gives them a sense of ownership and involvement in the business.
4. Discuss the reasons why a business might want to change from being a sole trader to a private
limited company:

Following are the main reasons when business usually change to o change being a sole trader to a private
limited company:

● Limited Liability: Becoming a private limited company can protect the owner's personal assets. If the
company faces financial trouble, the owner's personal savings and property are not at risk.
● Access to Capital: Private limited companies can raise funds more easily by selling shares to investors,
which can help with expansion and growth
● Credibility: Being a private limited company often gives a sense of professionalism and trustworthiness
to customers, suppliers, and potential partners. It can open up opportunities for larger contracts and
partnerships
5. Discuss the reasons why a business might want to change from being a private limited company to
a publicly held company:
Following are the main reasons when business usually change to o change from being a private limited
company to a publicly held company
● Raising More Capital: Going public allows a company to raise a significant amount of money by
selling shares to the public. This capital can be used for large-scale projects or expansion.
● Liquidity and Exit Strategy: Owners and early investors can sell their shares on the stock market,
providing liquidity and an exit strategy. It allows them to cash out some or all of their investment.
● Brand Visibility: Being a publicly held company can enhance brand visibility and recognition. It often
attracts more attention from the media and investors, which can further boost the company's
reputation.
● Acquisitions and Growth: Publicly held companies can use their stock as a currency for acquisitions.
They can buy other companies by offering their shares, which can be a strategic way to grow and
diversify their business.
1. Distinguish between the private and public sector:
Private Sector: This includes businesses and organizations owned and operated by individuals or
companies. They aim to make profits and are not run by the government whereas the Public Sector
comprises government-owned and operated entities, such as schools, hospitals, and government
agencies, providing services to the public. They are funded by taxpayers and not focused on making
profits.
2. Explain one feature of a sole trader:
Sole Trader Feature: A sole trader is a business owned and operated by one person. One key feature
is that the owner is personally responsible for the business's debts and liabilities. This means their
personal assets are at risk if the business faces financial problems.
3. Define the term shareholder
Shareholder: A shareholder is a person or entity that owns shares (a portion of ownership) in a
company. Shareholders can have a say in the company's decisions, and they may receive dividends (a
share of the company's profits).
4. Analyse two reasons why a privately held company might want to become a publicly held
company:
● Access to Capital: Going public allows a company to raise substantial funds by selling shares to the
public through the stock market. This capital can be used for expansion, research and development, or
paying off debts.
● Liquidity and Exit Strategy: Becoming a publicly held company provides liquidity for existing
shareholders. They can sell their shares on the stock market, turning their ownership into cash. It also
offers an exit strategy for early investors and founders.
5. Compare and contrast a privately held company and a public limited company:
● Privately Held Company: Owned by a small group or individuals, not open for public investment, fewer
regulatory requirements, less public scrutiny, may have limited access to capital.
● Public Limited Company: Owned by many shareholders, shares are publicly traded on stock
exchanges, more regulatory requirements and transparency, greater access to capital, often subject to
market fluctuations.
6. Recommend whether a sole trader should join a partnership:
● It depends on the individual's goals and circumstances. Joining a partnership can bring more resources
and expertise but also means sharing profits and decision-making. Consider the benefits and potential
challenges carefully.
7. Recommend whether a sole trader should become a private limited company:
● This decision depends on factors like the size of the business, liability concerns, and growth plans.
Becoming a private limited company can offer protection of personal assets but involves more
regulatory requirements. Seek legal and financial advice before making the move.
External factors that affects your business