A. Levels of Economic Activity
Get the stuff
Make the stuff
Sell the stuff
Make the stuff better
Four levels of Economic Activity
• Countries can have up to four levels of
economic activity, BUT not every country
has all four.
• There are four (4) levels of economic
activities:
– Primary
– Secondary
– Tertiary
– Quaternary
Economic Activity Levels
1. Primary Industry
– Economic activities that
use the Earth’s natural
resources. (Process of
extracting natural
resources)
– Any country can extract
their natural resources.
• Examples include
farming, fishing,
mining, oil drilling,
etc.
Economic Activity Levels
• Secondary Industry
– Economic activities that
change primary materials
into usable consumer
products. (Producing manufacture)
– Adding value to a natural
resources and creating
products.
– Example: can of tuna
Water Production- Is this a primary or secondary
economic activity?
Economic Activity Levels
•Tertiary Industry
(how to pronounce:Tersherry)
– Providing professional SERVICES
and the services required to
distribute the products.
– Example: Nestle sells you bottled
water.
– provide services to primary,
secondary industries, communities
and individual consumers
– These are generally found in “more
developed” economies.
Economic Activity Levels
• Quaternary Industry
– Process of STUDYING product
research and improving on its
production.
– Example: Aquafina uses data from a
research lab to increase their products
purity.
– Countries has to be technologically
advanced.
– People are involved in jobs such as
information research, management
and administration and have a mass
consumption of goods and services.
– Found in countries with the highest
level of economic development
Economic Activity Levels: Pencil
• Primary Level
• Secondary Level
– Resources needed to
make a pencil:
•
•
•
•
Wood
Graphite (Lead)
Rubber (Eraser)
Metal
• Quaternary Level
• Tertiary Level
Economic Activity Levels: Pencil
• Primary Level
– Resources
needed to make a
pencil:
•
•
•
•
Wood
Graphite (Lead)
Rubber (Eraser)
Metal
• Tertiary Level
• Secondary Level
– Putting the
different
resources that
make up the
pencil together at
the factory
– Manufacture the
pencil
• Quaternary Level
Economic Activity Levels: Pencil
• Primary Level
– Resources
needed to make a
pencil:
•
•
•
•
Wood
Graphite (Lead)
Rubber (Eraser)
Metal
• Tertiary Level
(service)
– Selling the pencil
to consumers
(book shop)
• Secondary Level
– Putting the
different
resources that
make up the
pencil together at
the factory
• Quaternary Level
Economic Activity Levels: Pencil
• Primary Level
– Natural Resources
needed to make a
pencil:
•
•
•
•
Wood
Graphite (Lead)
Rubber (Eraser)
Metal
• Secondary Level
– Putting the
different
resources that
make up the
pencil together at
the factory
• Quaternary Level
• Tertiary Level
– Selling the pencil
to consumers
– The CEO (leader)
of the pencil
company
– Researching and
developing new
types of pencils
and better ways
of making pencils
B. What is the Market
• Market is an
• Consumers and
organized way for
producers
producers and
exchange goods
consumers to trade
and services in the
goods and
Market.
services.
C. Profit Vs. Revenue
I own a business = I want profit (money)
Check the example:
Case : My business is to manufacture furniture.
A customer asked me to make a set of tables.
1. Costs and Expenses = $1000 (I paid that from my pocket)
2. Revenue= $3000 (what the customer paid me)
3. revenue – costs and expenses=Profit
$3000 – $1000 = $2000 (this is pure money in my pocket = the profit)
D. Specialization


1.
2.
3.
4.
Definition: I concentrate on limited goods or services (focus on few features)
Why:
use less resources
use them efficiently
it leads to increase production
I will have more consumers buying my products.
 Example:
 I am producing a new phone
 instead of including and focusing on all the features in the phone, or including 20
different additional feature, I just focus or Specialize at two important features as
in the camera and the battery
 I just add two new features like a better camera resolution and a better battery
E. Competition
• Profit is affected by competition
• It is the producers fighting over who will
win more consumers
• You lose more consumers, you lose your
money!!!!!
 How can producers win the competition?
Advertise your products
Make offers to attract the consumer