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IB Business Management SL 1.2.1 Private and public sectors Question Bank

Practise IB Business Management SL 1.2.1 by distinguishing private and public-sector organisations and their objectives.

Syllabus
First assessment 2024
Course
Business management SL
Level
SL

Exam points

  • Define the private and public sectors and identify a characteristic of each.
  • Explain how ownership and objectives differ between a government organisation and a private firm.
  • Use a case example to classify an organisation and justify the classification.

1.2.1—Private and public sectors question 1

[Maximum number: 2]

Belluno Frames (BF)
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Belluno Frames ( B F ) manufactures high-quality frames for glasses (spectacles). Like many other firms in the private sector in northern Italy, the business is small, family-owned, and operates as a private limited company. Giovanni and Elda Rizzo own 100 \% of the shares, nherit. Giovanni designs the frames. Antonio and two employees which their son Antonio will inherit.
B F is located in a building that Giovanni and Elda own, near their house, 42 kilometres outside of Belluno. Antonio and the two employees live in the same village as B F. The road to Belluno is narrow, with traffic that moves very slowly because of farm vehicles. Antonio, who wants the business to grow, has asked his father to rent a building in the industrial park in Belluno with good road access. BF's new location would be closer to suppliers and customers. It would also improve B F 's visibility.
Currently, B F sells on average 1300 frames per month. Each frame is sold at an average price of € 24. Below are the costs (all figures in € ) for B F at its current location and if it moved to the industrial park in Belluno.
Monthly fixed costs:

Table for Question 1.2.1—Private and public sectors question 1 — IB Business Management SL

Variable costs per frame:

Table for Question 1.2.1—Private and public sectors question 1 — IB Business Management SL

Antonio believes that B F 's sales will grow on average to 1700 frames per month in the new location. To reach that level, Antonio suggests that B F offer extra financial rewards in addition to their usual salaries to employees after 1300 frames have been sold each month (the current monthly average). Giovanni and Elda are reluctant.

Define the term private sector.

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