ECONOMIC ACTIVITIES (ECONOMIC SECTORS)
An economic activity is any activity that generates revenue or income. For e.g. production, distribution and consumption.
It can also be defined as activities undertaken by individuals, businesses and governments to produce, distribute and consume g
satisfying human wants and needs.
TYPES OF ECONOMIC ACTIVITIES
1. Production: is the creation of goods and services to satisfy human wants. You could also define production as the creation of
Production occurs in;
A. Industry: e.g. mining, manufacturing, building and construction, agriculture etc.
B. Commerce: These are services provided by businesses e.g. trading, banking, insurance, warehousing, transport and a
C. Provision of direct services: e.g. administration, teaching, transport, military, police, artists, servants and musicians.
2. Distribution: is the process of making goods and services available to the final consumer. Production is not complete until th
consumer.
3. Consumption: is the process of making use of goods and services produced to satisfy human wants. E.g. eating food, listenin
Consumption is economically important because, it creates demand for goods and services.
4. Exchange: The buying and selling of goods and services through transactions that involve currency, barter or other forms of
5. Investment: The allocation of resources to create and increase productive capacity for profit.
6. Employment: This is where the talent and skill of labour is engaged for production of goods and services.
7. Innovation: The introduction of new ideas and technologies to improve productivity.
8. International trade: The exchange of goods and services across national borders, allowing countries to benefit from compar
CLASSIFICATION OF GOODS
A.(i) FREE GOODS: These are goods which are abundantly available and useful but do not command price. E.g. air, rain, sunsh
(ii) ECONOMIC GOODS: These are goods which are scarce in relation to their demand, command price and human effort is
bread, car etc.
B.(i) CONSUMER GOODS: These are goods which are meant for direct consumption to satisfy human wants. E.g. bread, rice e
perishable whiles others are durable.
(ii) CAPITAL / PRODUCER / INVESTMENT GOODS: They are goods used in further production of other goods to satisfy h
etc
C.(i) PRIVATE GOODS: Goods consumed by only one individual. Therefore, they are not available for anyone else to consume
(ii) PUBLIC GOODS: Goods available for consumption by anyone. For e.g., public parks and street lighting.
D.(i) DURABLE GOODS: Goods having a long lifespan and which can be used repeatedly.
They provide satisfaction for extended periods of time. For e.g., car and furniture
(ii) PERISHABLE (NON-DURABLE GOODS): Goods with a short lifespan. They are quickly consumed. For e.g., food
E.(i) TANGIBLE GOODS: Physical products that can be touched. For e.g., electronic goods, clothing and furniture.
(ii) INTANGIBLE GOODS: These goods that cannot be touch. They include services such as education and healthcare.
F.(i) NORMAL GOODS: Goods for which demand increases as income increases. For e.g., milo, milk and rice.
(ii)INFERIOR GOODS: Goods for which demand decreases as consumer income increases. For e.g., ‘gari’, ‘aborbi’, charcoa
G.(i) LUXURY GOODS: Goods with elastic demand. Their demand responds easily to changes in price. Their demand increase
Also, more is demanded as their price increases. For e.g., high-end fashion, luxury cars and premium electronics.
(ii) NECESSITY GOODS: Goods with inelastic demand. Their demand does not respond easily to changes in price. Their dem
income level of the consumer. The same quantity is demanded whether the level income increases or decreases. For e.g., salt, oi
H.(i) INTERMEDIATE GOODS: Semi-finished goods which are used in further production of finished goods. For e.g., raw ma
(ii) FINAL GOODS: Goods which are sold directly to the final consumer for consumption.
I.(i) HOMOGENEOUS GOODS: Goods with no real differences or variations in quality, taste, smell, colour or texture. E.g., ag
rice.
(ii) HETEROGENEOUS GOODS: Goods with differences or variations in quality, taste, smell, colour or texture. Branded clo
specifications.
SECTORS OF AN ECONOMY / CLASSIFICATION OF ECONOMIC ACTIVITIES
Economic activities can be classified into primary, secondary and tertiary sectors.
Definition of the primary, secondary and tertiary sectors
Primary Sector (Production) Secondary Sector
An economic activity is any activity that generates revenue or income. For e.g. production, distribution and consumption.
It can also be defined as activities undertaken by individuals, businesses and governments to produce, distribute and consume g
satisfying human wants and needs.
TYPES OF ECONOMIC ACTIVITIES
1. Production: is the creation of goods and services to satisfy human wants. You could also define production as the creation of
Production occurs in;
A. Industry: e.g. mining, manufacturing, building and construction, agriculture etc.
B. Commerce: These are services provided by businesses e.g. trading, banking, insurance, warehousing, transport and a
C. Provision of direct services: e.g. administration, teaching, transport, military, police, artists, servants and musicians.
2. Distribution: is the process of making goods and services available to the final consumer. Production is not complete until th
consumer.
3. Consumption: is the process of making use of goods and services produced to satisfy human wants. E.g. eating food, listenin
Consumption is economically important because, it creates demand for goods and services.
4. Exchange: The buying and selling of goods and services through transactions that involve currency, barter or other forms of
5. Investment: The allocation of resources to create and increase productive capacity for profit.
6. Employment: This is where the talent and skill of labour is engaged for production of goods and services.
7. Innovation: The introduction of new ideas and technologies to improve productivity.
8. International trade: The exchange of goods and services across national borders, allowing countries to benefit from compar
CLASSIFICATION OF GOODS
A.(i) FREE GOODS: These are goods which are abundantly available and useful but do not command price. E.g. air, rain, sunsh
(ii) ECONOMIC GOODS: These are goods which are scarce in relation to their demand, command price and human effort is
bread, car etc.
B.(i) CONSUMER GOODS: These are goods which are meant for direct consumption to satisfy human wants. E.g. bread, rice e
perishable whiles others are durable.
(ii) CAPITAL / PRODUCER / INVESTMENT GOODS: They are goods used in further production of other goods to satisfy h
etc
C.(i) PRIVATE GOODS: Goods consumed by only one individual. Therefore, they are not available for anyone else to consume
(ii) PUBLIC GOODS: Goods available for consumption by anyone. For e.g., public parks and street lighting.
D.(i) DURABLE GOODS: Goods having a long lifespan and which can be used repeatedly.
They provide satisfaction for extended periods of time. For e.g., car and furniture
(ii) PERISHABLE (NON-DURABLE GOODS): Goods with a short lifespan. They are quickly consumed. For e.g., food
E.(i) TANGIBLE GOODS: Physical products that can be touched. For e.g., electronic goods, clothing and furniture.
(ii) INTANGIBLE GOODS: These goods that cannot be touch. They include services such as education and healthcare.
F.(i) NORMAL GOODS: Goods for which demand increases as income increases. For e.g., milo, milk and rice.
(ii)INFERIOR GOODS: Goods for which demand decreases as consumer income increases. For e.g., ‘gari’, ‘aborbi’, charcoa
G.(i) LUXURY GOODS: Goods with elastic demand. Their demand responds easily to changes in price. Their demand increase
Also, more is demanded as their price increases. For e.g., high-end fashion, luxury cars and premium electronics.
(ii) NECESSITY GOODS: Goods with inelastic demand. Their demand does not respond easily to changes in price. Their dem
income level of the consumer. The same quantity is demanded whether the level income increases or decreases. For e.g., salt, oi
H.(i) INTERMEDIATE GOODS: Semi-finished goods which are used in further production of finished goods. For e.g., raw ma
(ii) FINAL GOODS: Goods which are sold directly to the final consumer for consumption.
I.(i) HOMOGENEOUS GOODS: Goods with no real differences or variations in quality, taste, smell, colour or texture. E.g., ag
rice.
(ii) HETEROGENEOUS GOODS: Goods with differences or variations in quality, taste, smell, colour or texture. Branded clo
specifications.
SECTORS OF AN ECONOMY / CLASSIFICATION OF ECONOMIC ACTIVITIES
Economic activities can be classified into primary, secondary and tertiary sectors.
Definition of the primary, secondary and tertiary sectors
Primary Sector (Production) Secondary Sector
