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Difficulty: MediumMeaning and Types of Production

An agro-allied enterprise in Ibadan purchases raw cassava roots from rural farm settlements and transforms them into refined, packaged cassava starch for industrial bakeries. Which combination of economic utility and stage of production is illustrated by this enterprise?

  1. Form utility and secondary productionAnswer
  2. B
    Place utility and primary production
  3. C
    Time utility and tertiary production
  4. D
    Possession utility and direct production

Answer

Form utility and secondary production
Secondary production encompasses all economic activities that process or manufacture raw materials into semi-finished or finished goods. By converting raw cassava roots into packaged starch, the enterprise alters the physical composition of the material, which directly creates form utility for industrial consumers.

Step-by-Step Solution

1
Identify the stage of production involved in processing raw cassava roots into packaged starch.
Secondary production, as raw materials from agriculture are converted into refined industrial goods through manufacturing processes.
Primary production involves raw extraction (farming cassava), secondary involves processing/manufacturing (converting cassava to starch), and tertiary involves providing commercial services.
2
Identify the type of utility created by altering the physical state of the cassava.
Form utility, because changing the appearance, structure, or composition of raw cassava makes it useful for industrial bakeries.
Form utility is generated whenever manufacturing or processing alters the physical structure of a commodity to increase its usefulness.

Key Concept

Types of Production and Economic Utilities
Estimated Time:1m 0s
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Topics

Meaning and Types of Production

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