1- Describe a scenario for the production and consumption of a product that involves all three sectors of an economy. Explain what each sector contributes to the transactions and what each sector receives.
Which sector benefits the most from the transactions involved and why?
2- Give an example of a real world market that approximates perfect competition. Why isn't a perfectly competitive market possible in actuality?
Give an example of a market that is a monopoly. Why are natural monopolies an exception to the arguments against monopolies?
1. There are three major economic sectors and these three sectors are primary, secondary and tertiary. Each sector has its own importance. They are the most important parts of the economy and have an equal importance. Primary economic sector is the economic sector where the raw material for production is obtained. If we take an example of automobile industry we can find that the industry falls under primary economic sector where the industry obtains raw material for the production of vehicles and cars. Here primary economy acts as a source for the secondary economic sector.
The secondary economic sector, in this sector raw materials are processed in the finished goods. Auto mobile sector that obtains the raw material from the primary economic sector process the raw material ...
The solution describes products involved in all three sectors of the economy. A perfect competitive economy is examined. The sector benefits the most from the transactions involved and why are determined.