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Types of Economic activity
Economic Activity
The term “economic activity” refers to any activity which produces a good or service. People earn a living by engaging in various economic activities. Though people engage in thousands of different economic activities around the world. Economic geography deals with the variations on the surface of the earth of activities related to production, exchange and consumption of goods and services.
Economic activities exist at all levels within a society. Additionally, any activities involving money or the exchange of products or services are economic activities. For instance, running a small business is a great example of economic activity.
Employees working in a factory and receiving wages, for example, are performing economic activities. Their employers are also economically active because they pay the workers and make and sell goods.
The term contrasts with non-economic activities. When somebody goes to a temple to pray or meditate, for example, they are performing a non-economic activity. So is helping a friend study if you receive no money for that help.
All the economic activities can be divided into four categories as follows:
- Primary activities
- Secondary Activities
- Tertiary activities
- Quaternary services
Primary activities
Primary activities pertain to obtaining of natural resources from nature directly. Because of this they are also called extractive industries. The products of some primary industries, such as fishing or agriculture, can be used as they are. The products of other primary industries, such as bauxite and crude oil, are used as raw materials for other industries. Hunting, gathering, farming, animal husbandry, fishing, forestry, obtaining minerals from earth crust etc. are primary activities. Since these activities are outdoor in nature, the people engaged in them are called red-collar workers.
Secondary Activities
These industries produce processed goods. Many take raw materials from primary industries and make them into products for sale. Examples of secondary industries include clothing manufacture and food processing. Secondary industries are also called manufacturing industries. Secondary activities pertain to adding value to already existing products by changing their form via processing etc. Manufacturing industries are included in the secondary activities. We note here that sometimes, commercial farming is also included in secondary activities because of use of hybrid seeds and modern technology in cultivation. The workers engaged in secondary activities are called blue-collar workers.
Tertiary activities
Tertiary activities are concerned with providing service. The personal and business services such as clerks, barbers etc. are tertiary services. They also include the fire service, healthcare, tourism and retailing. People engaged in these activities are called pink-collar workers.
Quaternary services
The services which are provided in special environments are called quaternary services. For example, health services are provided into hospitals, hospitality services are provided in hotels, teaching service is provided into school and institutors, entertainment services are provided into theatres, software services are provided over internet or computers. The workers engaged in such services are called white-collar workers. Researchers, legal consultants, financial advisors, professional consultants, software personnel etc. are white-collar workers. In summary, Quaternary activities are developed from of services, with specific knowledge, technical skills, and competence of communication or administration.
Put simply; economic activities are those which we undertake to earn income, money, or wealth.
Unlimited wants vs. scarcity
With these activities, we secure the greatest satisfaction of unlimited wants with scarce and limited means.
‘Unlimited wants’ is an economic term. It refers to a human’s appetite for things. Humans never get enough because there is always something else that we want or need.
However, even though we have unlimited wants, the resources we have available to get them is limited. In other words, the things we want are scarce.
Scarcity, which has plagued us ever since we first set foot on this Earth, has two halves:
- Limited resources.
- Unlimited wants.
GDP
GDP is the sum of every economic activity in a country. GDP stands for gross domestic product.
It is the most important economic measure of the state of a country’s economy. With one simple figure, we can tell whether an economy has grown, shrunk, or remained the same since one year ago.
Activity
Research the GDP of any Caribbean country to present next class, be sure to include which sector that the particular country gains the most income with regards to economic activity.