Economic activity

Question 1

What are the 3 types of economic activities.

Answer 1

Primary sector
Secondary sector
Tertiary sector

Question 2

What is the primary sector

Answer 2

The primary sector incorporates all the extractive industries, including mining (for example, bauxite), fishing, forestry and farming.

Question 3

Advantages of primary sector.

Answer 3

-The country is able to supply raw materials to firms for conversion
-The country can gain a comparative advantage over others in producing certain goods
-Creation of jobs
-Generation of export revenues.

Question 4

Disadvantages of primary sector.

Answer 4

-Depletion of natural resources, especially because of exploitation
-Potential to earn more revenue if raw materials were to be converted into finished products
-A decrease in the demand for finished products will decrease the demand for primary products and so reduce revenue.

Question 5

What is the secondary sector?

Answer 5

The secondary sector involves the changing of raw materials into finished goods. It incorporates the manufacturing and construction industries. eg. Trinidad Cement Ltd

Question 6

Advantages of secondary sector

Answer 6

-Reduction in the importation of goods that are produced using the same raw materials from the Caribbean
-Earn foreign exchange from the products that are exported
-One primary product can be used to create a number of secondary products
-Creation of jobs in different areas other than the extractive industry
-Possible increase in investment in the manufacturing sector
-Improvement in the country’s Gross Domestic Product and so possibly its standard of living.

Question 7

Disadvantages of the secondary sector

Answer 7

-The profit motive of manufacturing firms could lead to depletion of some primary products
-A number of manufacturing companies are often multinationals which repatriate their profits instead of
reinvesting in the host country
-Some of the raw materials used in the secondary sector have to be imported and this uses up the foreign
exchange earnings of the country.

Question 8

What is the tertiary sector?

Answer 8

The tertiary sector does not produce goods, but instead provides services. Over the last decade the Caribbean
business environment has become more service oriented. Some of these services include tourism, financial services, transportation and management services.

Question 9

Advantages of tertiary sector

Answer 9

-Generates foreign exchange, especially from tourism
-Creation of jobs, especially because the sector is mostly labour intensive
-The sector does not depend heavily on primary products and so would not deplete the countries’ natural resources
-As mentioned, the sector contributes to the Gross Domestic Product of countries
-Less pollution generated when compared with the primary and secondary sectors.

Question 10

Disadvantages of tertiary sector

Answer 10

-Services as a whole can change quickly and so it may not be sustainable
-It may require high training costs to ensure that the service being offered is the same regardless of location
-Services such as tourism can impact on a country’s culture and values and may even lead to a change in people’s social behaviour.