Cambridge International as and a level Economics Ebook

Scarcity and choice: 
Through specialisation and the 
division of labour, resources that are available can be 
used to increase what is being produced, so meeting more 
wants.
KEY CONCEPT LINK
Resource allocation in diff erent 
economic systems and issues 
of transition
Economic structure
Th
e term 
economic structure
refers to the way in which 
an economy consists of various sectors. It is used to show 
the balance of economic activity, usually measured in 
terms of the value of total output, between these sectors. 
Th
e following sectors are recognised:
■
Primary sector: This consists of agriculture, fishing and 
activities such as mining and oil extraction.
■
Secondary sector: This term is used to describe the 
wide range of manufacturing activities that are found 
in an economy. Typical examples are: food processing, 
textiles and clothing, iron and steel production, vehicle 
manufacturing, and electronics.
■
Tertiary sector: This is the service sector and covers a range 
of diverse activities such as retailing, transport, logistics, 
banking, insurance and education.
■
Quaternary sector: A relatively new term to denote 
the knowledge-based part of the economy, especially 
the provision of information. Typical examples are 
scientific research and product development, computing 
and ICT.
As economies develop their economic structure changes 
and there is a progression from primary to secondary to 
tertiary activities. In developed economies, the tertiary 
sector tends to be the principal employer. In the UK, for 
example, in 2012 around four out of every fi ve people in 
employment were employed in the service sector. Th
is is 
not the case in less developed economies. In Tanzania and 
Kenya, by way of contrast, similar proportions of workers 
are employed in the primary sector alone.