Types of Economic Activity

Question 1

What does the primary sector encompass?

Answer 1

The primary sector incorporates all extractive industries, including mining, fishing, forestry, and farming.

Question 2

What are the advantages of the primary sector?

Answer 2

1. Supply of raw materials to firms for conversion.
2. Comparative advantage in producing certain goods.
3. Creation of jobs.
4. Generation of export revenues.

Question 3

What are the disadvantages of the primary sector?

Answer 3

1. Depletion of natural resources due to exploitation.
2. Potential for higher revenues if products were converted into finished products.
3. Decrease in demand for finished products reduces demand for primary products.

Question 4

What does the secondary sector involve?

Answer 4

The secondary sector involves changing raw materials into finished goods and includes manufacturing and construction industries.

Question 5

What are the advantages of the secondary sector?

Answer 5

1. Reduction in importation of goods produced using the same raw materials.
2. Earning foreign exchange from exported products.
3. One primary product can create multiple secondary products.
4. Job creation in various areas.
5. Increased investment in manufacturing sector.
6. Improvement in GDP and standard of living.

Question 6

What are the disadvantages of the secondary sector?

Answer 6

1. Profit motive may lead to depletion of primary products.
2. Multinational companies may repatriate profits instead of reinvesting.
3. Some raw materials must be imported, using foreign exchange earnings.

Question 7

What characterizes the tertiary sector?

Answer 7

The tertiary sector provides services rather than producing goods and has become a main contributor to GDP in Caribbean countries, with tourism being the most popular.

Question 8

What are the advantages of the tertiary sector?

Answer 8

1. Generates foreign exchange, especially from tourism.
2. Job creation, as the sector is labor-intensive.
3. Less dependence on primary products, reducing resource depletion.
4. Contribution to GDP.
5. Less pollution compared to primary and secondary sectors.

Question 9

What are the disadvantages of the tertiary sector?

Answer 9

1. Services can be volatile and may not be sustainable.
2. High training costs may be required.
3. Services like tourism can impact culture and social behavior.

Question 10

What are some changes in economic activity?

Answer 10

Changes can include weather conditions (drought, flooding), global warming (changes in sea level, pests, and disease), and a shift towards a more service-oriented economy.

Question 11

What is the economic problem related to resources?

Answer 11

The economic problem is that resources are plentiful but insufficient to meet unlimited human wants, leading to scarcity.

Question 12

What is the private sector?

Answer 12

The private sector consists of businesses owned by individuals or groups aiming to make profits, including sole traders, partnerships, and corporations.

Question 13

What is the public sector?

Answer 13

The public sector includes businesses owned and controlled by the government, aiming to provide benefits to society rather than making profits.

Question 14

What are some types of business organizations?

Answer 14

Types include sole trader, partnership, private limited companies, public limited companies, franchising, cooperatives, and joint ventures.

Question 15

What factors are determined by a business’s legal structure?

Answer 15

1. Sharing of profits or losses.
2. Tax obligations.
3. Ease of formation.
4. Funding.
5. Legal liabilities.
6. Continuity of existence.