WAEC 2023 Economics · Question 45

Warehousing is an economic activity that falls under

Options

  1. A.secondary production
  2. B.primary production
  3. C.tertiary production
  4. D.intermediate production

Answer: C. tertiary production

Explanation written with AI and checked against the answer key

Step 1: Analyze the question The question asks which stage of production warehousing belongs to. So we need to recall the three levels of production.

Step 2: The concept

  • Primary production: extracting or harvesting natural resources directly (farming, fishing, mining, forestry, crude oil drilling).
  • Secondary production: turning raw materials into finished or semi-finished goods (manufacturing, construction, refining, processing cocoa into chocolate).
  • Tertiary production: providing services that help move goods from producers to consumers (trade, transport, banking, insurance, advertising, warehousing, communication).

"Intermediate production" is not one of the standard stages of production. It refers to goods used up in producing other goods.

Step 3: Apply it Warehousing means storing goods until they are needed. It does not extract anything from nature (so not primary), and it does not change raw materials into new products (so not secondary). It is a service that supports the distribution of goods, which makes it a tertiary activity. Warehousing creates time utility, because goods are available when consumers need them.

Step 4: Answer Warehousing is a service that aids distribution, so it falls under tertiary production.

Tip: Remember the phrase "Pull it out, Shape it, Serve it", meaning Primary extracts, Secondary manufactures, and Tertiary provides services. Any activity that stores, moves, sells, insures, or finances goods is a tertiary activity (a service).

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