SECTORS OF ECONOMY

                                                          Sectors of Production

1. Primary Sector:

• Definition: Activities where goods are produced by exploiting natural resources.

• Examples: Agriculture, Animal Husbandry, Forestry, Fishing, Mining.

• Note: In India, Mining and Electricity production are often categorized under the Secondary Sector in industrial  classifications (IIP), but theoretically, mining is primary.

2. Secondary Sector (Industrial Sector):

• Definition: Activities where natural products are changed into other forms through manufacturing.

• Examples: Construction (Buildings, Roads, Bridges), Manufacturing (making fridges, cars, etc.).

3. Tertiary Sector (Service Sector):

• Definition: Activities that support the development of the primary and secondary sectors.

• Examples: Banking, Insurance, Education, Health, Telecommunications, Hotels, Transport.

4. Quaternary Sector:

• Definition: Knowledge-based part of the economy; intellectual services.

• Examples: Research & Development (R&D), Cultural activities, Consultation, IT services.

5. Quinary Sector:                                                                                                                                                                                  

• Definition: Services related to high-level decision making ("Gold Collar" jobs).

• Examples: President, Prime Minister, Bureaucrats, CEOs, Board of Directors.

2. Factors of Production

#Basic Economic Rules

•  1.Rule of Demand: Inverse relationship between Price and Demand. (Price increase, Demand decrease).

  

• 2.Rule of Supply: Positive relationship between Price and Supply. (Price increase, Supply increase).

• 3.Equilibrium: The point where Demand and Supply intersect determines the price.

Exceptions to Rule of Demand

1. Giffen Goods: Inferior goods where demand rises when price rise (e.g., staple foods in crisis).

2. Veblen Goods:Goods of social prestige (Luxury cars, designer bags). Demand increases with price.

3. Basic Necessities: Demand is inelastic (e.g., Salt, Medicine).

4. Fashionable Good