Final answer:
Economies can be categorized into different sectors, including primary, secondary, tertiary, and quaternary. The marginal product of low-skilled workers is often higher in the manufacturing sector compared to the agricultural sector. Traditional economies, based on tradition, have limited economic progress and development.
Step-by-step explanation:
In the study of economics, scholars often analyze different types of societies and their economies by categorizing them into four sectors: primary, secondary, tertiary, and quaternary.
These sectors have distinct focuses and include activities such as extracting raw materials, producing finished goods, providing services, and generating ideas and knowledge.
When examining economic development, economist Sir W. Arthur Lewis proposed a theoretical framework known as the dual sector economy. He observed that low-skilled workers tend to have a greater marginal product in the manufacturing sector compared to the agricultural sector. This is because mature agricultural societies have limited opportunities for additional farmers, leading to surplus workers, while early-stage manufacturing sectors have a high demand for low-skilled labor.
Traditional economies, found in parts of Asia, Africa, and South America, are the oldest economic systems. In these economies, economic affairs are organized based on tradition, with occupations typically remaining within families.
Most families are engaged in farming using traditional methods, and the produced goods are consumed by the same family. However, due to the lack of economic progress and development driven by tradition, traditional economies generally experience limited growth.