(a) What is production? (b) Illustrate with a labeled diagram the main divisions and subdivisions of production.
Question 1 Report
(a) What is production?
(b) Illustrate with a labeled diagram the main divisions and subdivisions of production.
Answer Details
(a) Meaning of production
Production is the creation of utility by making goods and services available to satisfy human wants. It includes the extraction of raw materials, their processing into useful goods, and the provision of services that bring goods to consumers.
(b) Main divisions and subdivisions of production
The divisions and subdivisions of production are illustrated below:
Explanation:
- Direct production is the production of goods and services for the producer's own use, for example, a farmer growing food for his family.
- Indirect production is the production of goods and services for exchange or sale.
- Primary production involves obtaining raw materials from nature, for example farming, fishing, mining, forestry and quarrying.
- Secondary production involves processing raw materials into semi-finished or finished goods. It includes manufacturing and construction.
- Tertiary production involves the provision of services. These services may be commercial services, such as transport, banking and insurance, or direct services, such as teaching, medical and legal services.
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