gcse economics - tools of the trade: public and private sector
No two economies are organised in the same way, but they all have to solve three basic problems
PUBLIC SECTOR
Organisations owned and controlled by the state or government
e.g. Mill Hill School, Ripley Hospital, Ripley Library
Objectives
• Provide an essential service
•
Provide it cheaply or free of charge, therefore it is available to everybody
•
They are generally beneficial to society. It is good to have healthy and
well educated people in the country
PRIVATE SECTOR
Organisations owned and controlled by private individuals and organisations
e.g. Top Shop, Virgin, British Telecom
Objectives
- To survive in a competitive market
- To maximise their profits
- To make returns for their shareholders (dividends)
PRIVATISATION
The sale of public sector organisations to the private sector. This means that they are no longer owned and controlled by the government but instead by private individuals and shareholders
Recent examples:
British Rail was privatised now private firms such as Virgin and Midland Mainline provide rail services
British Telecom is now owned by private firms
rather than the government it also faces competition from other firms
ACTION
A Compare the objectives of the public sector to the private sector
B Which has the greater need to make a large profit? Explain your answer
SMART
THINKING
C How might a state school be different if it was owned and controlled by a private firm instead of the government?
These GCSE Economics revision notes have been kindly provided by Peter Davies of Mill Hill School, Ripley Keep Up-todate with your GCSE Economics - Subscribe Free to Economics in the News by Email
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