Multiple Choice
Which of the following lists correctly identifies the four factors of production along with a corresponding example for each?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
Which of the following can be categorized as a primary activity in the context of factors of production?
A
Retailing consumer electronics
B
Providing financial consulting services
C
Manufacturing automobiles
D
Mining of iron ore
Verified step by step guidance1
Step 1: Understand the concept of 'primary activities' in the context of factors of production. Primary activities involve the extraction and harvesting of natural resources directly from the earth, such as agriculture, fishing, forestry, and mining.
Step 2: Analyze each option to determine if it involves direct extraction of natural resources. Retailing consumer electronics involves selling finished goods, which is a tertiary activity (service sector).
Step 3: Providing financial consulting services is a service-based activity, also classified as tertiary, not involving natural resource extraction.
Step 4: Manufacturing automobiles involves transforming raw materials into finished products, which is a secondary activity (industrial sector), not primary.
Step 5: Mining of iron ore involves extracting raw materials directly from the earth, which fits the definition of a primary activity.
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