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IGCSE · Cambridge (CIE) · 0986

Classify primary, secondary and tertiary activity

Classify businesses by whether they extract resources, process materials or provide services.

Section 1 · Understanding business activity

Understanding business activity · Cambridge IGCSE (9–1) Business Studies 0986 · 1.2
Exam scope and assessment notes

Cambridge IGCSE (9–1) Business Studies 0986, 2026 syllabus, Version 2. This is the separate 9–1 legacy route; 0774 replaces it for first assessment June 2027. Candidates are not assessed on constructing income statements or statements of financial position, nor on price-elasticity or exchange-rate calculations. Simple cash-flow forecast construction is assessed. Written practice is self-checked, not an official Cambridge grade; timed-paper evidence and human subject-teacher review remain outstanding.

Before you begin

  • No previous business study is assumed. Read each scenario for the decision-maker, objective, available evidence and constraints.

Work on paper. Try each question before revealing help, and explain why your method works.

Quick readiness check

Which sector extracts natural resources?

What you will learn

  • Define the three economic sectors
  • Classify business activity
  • Explain sector changes over time

Follow what the business does

Primary activity extracts or obtains natural resources, such as farming, fishing or mining. Secondary activity manufactures or processes materials into goods, including construction.

Tertiary activity provides services, such as retail, transport, banking, education or healthcare. Classify the activity described, not simply the company's name or its customers.

Trace a value chain

A raw-cocoa farm is primary, a chocolate factory is secondary and a retailer is tertiary. A finished product may pass through all three sectors.

A business can operate in more than one sector. State the activity being classified and avoid assuming that a country or company can only have one dominant sector forever.

Pause and explain

A factory converts cotton into clothing. Which sector is this?

Put the idea to work

Worked example

A company mines copper, another turns it into wire, and a third installs electrical wiring in buildings. Classify each activity.

Show the worked solution
  1. Mining obtains a natural resource.
  2. Making wire processes material into a product.
  3. Installation is a service.

Answer Mining: primary; wire manufacture: secondary; installation: tertiary.

Try a topic test

Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.

Test this topic →

From guided practice to a new situation

Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.

1 · Guided

Classify a wheat farm, a flour mill and a bakery café that sells bread and serves meals. Explain the café's main sector.

Give me a hint

Identify extraction, processing and service provision.

Compare my reasoning
  1. Growing wheat obtains a natural product.
  2. Milling processes it into flour.
  3. The café mainly provides food service to customers.

Farm: primary; mill: secondary; bakery café: mainly tertiary because it provides a service, though it also makes bread.

Look for these in your work

  • First two activities classified
  • Mixed activity acknowledged
  • Main activity justified
2 · Independent

An economy's employment shifts from agriculture to manufacturing and later to healthcare and retail. Classify the sectors and describe the pattern without claiming that agriculture disappears.

Give me a hint

Name the sectors and use cautious language about relative employment.

Compare my reasoning
  1. Agriculture is primary.
  2. Manufacturing is secondary.
  3. Healthcare and retail are tertiary; shares can change without a sector reaching zero.

Employment is shifting toward secondary and then tertiary activity. The primary sector can remain important even if it employs a smaller share of workers.

Look for these in your work

  • Sectors matched
  • Change described
  • No absolute claim
3 · Transfer

A supermarket company owns farms, food-processing plants and stores. Can it be assigned to one sector without a stated classification rule? Explain.

Give me a hint

Consider the distinct activities in the value chain.

Compare my reasoning
  1. Farms are primary activity.
  2. Processing plants are secondary.
  3. Stores provide retail services in the tertiary sector.

Not reliably: the company operates in all three sectors. A response should state whether it classifies the whole company by its main activity, employment, output or a specified business unit.

Look for these in your work

  • All sectors identified
  • Mixed operation recognized
  • Rule requested

Common mistakes

  • Calling all businesses that sell goods secondary
  • Classifying from the company name instead of its activity
  • Treating the three sectors as mutually exclusive for every large business
Recall without your notes

What can you explain now?

Which sector extracts natural resources?

Compare with the explanation

Primary

Mining, fishing and farming are examples.

After trying it yourself, choose your next review. This is your self-assessment.

Your review choice appears on Today. Sign in to sync it across devices.

Make it stick

Describe one product moving through the primary, secondary and tertiary sectors.

If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.

Keep learning Business Studies (9-1)

Course scope and assessment

Ninety-eight original lessons map all 63 sections in the 2026 Version 2 syllabus, with worked examples and guided, independent and transfer practice. Cambridge states that 0986 is otherwise the same in subject content as 0450 but is graded 9–1. In June and November, entry is available in Administrative Zone 3 and to centres in Oman and UAE; confirm eligibility with Cambridge and your centre. Candidates cannot combine 0986 with 0450 or O Level 7115 in the same series. For 2027 first assessment, the code changes to 0774. Simple cash-flow forecast construction is assessed; construction of income statements and statements of financial position, price-elasticity calculations and exchange-rate calculations are excluded. Cambridge lists past papers and resources on the 0450 page for use with 0986. Full timed-paper practice, exam-grade evidence and human subject-teacher review remain outstanding; learner practice is self-checked and is not an official Cambridge grade.

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