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Buying and selling in a complex world - Different types of goods

6 important questions on Buying and selling in a complex world - Different types of goods

What is the primary sector?

All the industries that are engaged in the extraction of natural resources or the production of raw materials such as mining, farming, fishing,..

Originally did not need a lot of machinery. Nowadays heavy machinery and will reduce the number of workers in the future. Now 10% of total employment.

What is the secundary sector?

All the industries who are engaged in the manufacturing of usable products or finished goods. From raw material -> finished good

Requires heavy machinery, loads of waste and energy.

20% of the total workforce

What is the tertiary sector?

All the industries who provide services to other businesses or final consumers, also called the service sector. E.g. Retail, healthcare.

Focuses on interactions between people rather than the production of goods.

Employes 70% of the total workforce

What is the quarternary sector?

A new sector should come ahead, the quarternary sector will be about creation and distribution of knowledge. E.g. R&D, education, cosnulting,..

What are the 4 types of goods?

- Private goods= Excludable and rival, anyone who cannot afford these products is excluded and the consumption of of private goods by an individual prevents other individuals from consuming the same goods (rival). E.g. Ice cream, cars, houses,..

- Common recources= Non excludable but rival. These products can be used by virtually anyone but the availabilty to other individials is reduced. E.g. Water, fish, timber,..

- Public goods= Non-excludable and non-rival, no one can be prevented from using them. E.g. Fresh air, knowledge, national defense.

- Club goods= Exludable but non-rival. E.g. Cable televison, wireless internet,..

What is the economies of scale?

Factors that drive prodction costs down as the output increases. These can be internally influenced ( caused by factors within the firm) and externally influenced ( by factors outside the company).