Answer to Question #205688 in Microeconomics for vtg

Question

 Distinguish between Microeconomics and Industrial Economics.

• Explain the FIVE (5) categories or levels of industries.

• Discuss the technical factors that may be considered when making a decision on industrial location.

Answer 1

Microeconomics is part of economics concerned with single factors and effects of individual decision. In contrast, industrial economics is concerned with combining all factors of production such as labour and land to produce goods intended for the market.

Categories/levels of industries

primary level: This level involves the extraction and production of raw materials.

Secondary level: This level takes the raw materials produced at the primary level and manufacture them into goods.

Tertiary level: This level involves offering services such as banking.

Quaternary level: This level consists of the provision of information services.

Quinary level: This level provides human services.

Technical factors

When making decisions on industrial location , one should consider labour supply which should consist of workers with the right skills, power supply and raw materials for production of the goods, good transport and availability of market for the goods produced.