<aside> 💡 From this unit, you must know…

  1. What are the sectors of economic development?
  2. Why are some countries more developed than others?
  3. What are the challenges of a newly industrialized country? </aside>

Before understanding economics, we must first understand the concept of scarcity.

Definition: Scarcity - the state of being scarce or in limited supply.

What is economics?

Economics is how countries and societies answer the question of scarcity. If a country has a limited supply of bread… who gets bread, how much bread do they get, and how do they get it?

For example… In the United States, you must work to make money so that you can afford food. How much you get depends on how much of your income you are willing to spend.

In a Communist society, the government might determine how much bread you get based on your importance or rank.

Concept 1: Infrastructure and Development

Levels of Economic Activity

| Primary Economic Activity | The primary sector of the economy extracts or harvests products from the earth such as raw materials and basic foods.

Examples include agriculture, mining. | | --- | --- | | Secondary Economic Activity | The secondary sector of the economy produces finished goods from the raw materials extracted by the primary economy. All manufacturing, processing, and construction jobs lie within this sector.

Examples include manufacturing, refining. | | Tertiary Economic Activity | The tertiary sector of the economy is also known as the service industry. This sector sells the goods produced by the secondary sector and provides commercial services to both the general population and to businesses in all five economic sectors.

Examples include stores, grocery stores, car dealerships. | | Quaternary Economic Activity | The fourth sector of the economy, the quaternary sector, consists of intellectual activities often associated with technological innovation.

Examples include Amazon, app stores, online shopping. |

Levels of Development

Less Developed Country Less developed countries are countries with the following characteristics: low per capita income and widespread poverty, shortage of capital (money), population explosion and high dependency, and massive unemployment.
Newly Industrialized Country A country whose national economy has recently transitioned from being primary to being secondary.
More Developed/Developed County A county with a relatively high level of economic growth and security.