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Difficulty: HardPrimary, Secondary, and Tertiary Sectors of Production

An agribusiness firm in Edo State taps raw latex from its rubber plantation, processes the latex into motor vehicle tires at its manufacturing plant, and purchases marine insurance to protect export shipments against losses at sea. Which of the following correctly classifies these three economic activities in sequential order of production sectors?

  1. Primary sector, Secondary sector, and Tertiary sectorAnswer
  2. B
    Secondary sector, Secondary sector, and Tertiary sector
  3. C
    Primary sector, Secondary sector, and Direct service sector
  4. D
    Direct production, Indirect production, and Tertiary sector

Answer

Primary sector, Secondary sector, and Tertiary sector
Tapping natural latex from a plantation is an agricultural activity belonging to the primary sector of production. Transforming that latex into manufactured tires in a factory represents industrial processing, which belongs to the secondary sector. Securing marine insurance is an auxiliary to trade that facilitates commercial distribution, belonging to the tertiary sector.

Step-by-Step Solution

1
Analyze the first activity: Tapping raw latex from a plantation.
Tapping latex involves obtaining raw materials directly from nature (agriculture/extraction), which falls under the primary sector.
The primary sector encompasses all extractive and agricultural activities that extract natural resources.
2
Analyze the second activity: Processing latex into motor vehicle tires in a factory.
Manufacturing tires transforms raw materials into processed finished goods, which falls under the secondary sector.
The secondary sector covers manufacturing and construction activities that convert primary raw materials into finished or semi-finished goods.
3
Analyze the third activity: Purchasing marine insurance for export shipments.
Insurance provides a commercial auxiliary service facilitating trade, which falls under the tertiary sector.
The tertiary sector includes commercial services (auxiliaries to trade like insurance, banking, and transport) and direct services that support production and distribution.

Key Concept

Classification of economic activities across Primary, Secondary, and Tertiary sectors of production
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Topics

Primary, Secondary, and Tertiary Sectors of Production

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