Lesson
Three Sectors of the Economy
This lesson deals with secondary processing or manufacturing. However it is useful to have a perspective for where manufacturing fits in the whole economy. The three main sectors of ant economy are briefly outlined below and as you can see manufacturing is the secondary economic activity.
Primary economic activity involves the collection of raw materials from the earth. Farming, fishing, mining, forestry are the classic parts of the primary economy. The farmer takes plants from the land, the forester takes trees from the forest, the fisher takes fish from the ocean and the miner takes ore from the ground. All involve collecting natural resources.
Secondary economic activity involves processing or manufacturing raw materials into products for people to buy. It is often referred to as the manufacturing or processing sector. The cows are butchered in to roasts, T-bone steaks and ground beef and packaged for sale at the grocery store; the trees are milled into lumber or pulped into paper; the fish are gutted, filleted, and frozen for market; while the ore is refined into steel ribbons or copper wire or gold ingots. You can see that there would be a multitude of examples for secondary processing but all the activities start with a raw material and convert it to a product for sale. This is sometimes referred to as Value adding. The tree would be much less expensive to buy than the lumber. The lumber has value added. Ship building, as depicted above, is an example of the manufacturing sector.
Tertiary economic activity does not involve raw materials rather it involves providing service to people. Hence it is often referred to as the service industry. Nurses, doctors, lawyers, teachers, waitresses, hairdressers, sales people all provide services for other people. Tourism is an important part of the tertiary sector and golf has become a thrust for investment in Newfoundland & Labrador.
The Language of Manufacturing
- Inputs: materials & factors that go into making a product. Example; raw material, power, buildings, land, labor, decisions, capital, machinery
- Manufacturing processes: those processes that change a raw material to a usable form. Three types:
- Conditioning: minimal change to a resource. Example; logs into lumber; fish into fillets
- Analytical: resource converted to a number of different products. Example; cow into leather, milk & cheese
- Synthetic: several resources are combined to make one resource. Example; light bulb has glass, tungsten, Nitrogen & aluminum.
- Outputs: finished product from a manufacturing process. For example the output from the fish plant is fish sticks or frozen fish fillets.
Activity
Assigned Readings
- Read the introduction to Chapter 13 "Patterns in Manufacturing" on page 216
- Read "The Manufacturing Process" on pages 216-217.
Assigned Activities
- Search to find out what type of manufacturing is going on in your community
- Analyze it to determine if it is analytic, synthetic or conditioning and
- Share your findings with the class in the discussion forum.
Test Yourself
- Which sector of the economy deals with the collecting/harvesting of raw materials?
- Which sector of the economy deals with processing of raw materials to create a product?
- Which sector of the economy deals with providing services?
- Those materials put into making a product are generally referred to as _?_.
- Those products produced by manufacturing are generally refereed to as the _?_.
- _?_ manufacturing takes several resources and puts them together to create one product.
- _?_ manufacturing takes one resource and creates several different products from it.
- _?_ manufacturing makes minor changes to the raw material.
- The difference between the price of a product and the cost of producing a product.
- For a small fish plant that produces frozen fish fillets, identify each component:
- Inputs
- Raw material _____________
- Power _____________
- Buildings __________________
- Land __________________
- Machinery ______________
- Labor ________________
- Capital ________________
- Decisions ______________
- Outputs ? _____________
- Conditioning or analytic or synthetic processing?? ______________
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