Theory question 101
ProductionCommerce 2 (answer any five questions)
(a) What is production?
(b) Illustrate with a labelled diagram the main divisions and subdivisions of production.
Show the model answer
(a) Production is the creation of goods and services to satisfy human wants; it is complete only when the goods reach the final consumer.
(b) Diagram (labelled tree) showing: PRODUCTION divided into Industry, Commerce and Services.
Industry → Primary/Extractive (farming, fishing, mining, lumbering, hunting); Secondary → Manufacturing and Construction.
Commerce → Trade and Aids to trade. Trade → Home trade (wholesale, retail) and Foreign trade (import, export, entrepot). Aids to trade → transport, banking, insurance, warehousing, advertising, communication (and tourism).
Services → Direct (personal) services, e.g. teachers, doctors, lawyers; Indirect services, e.g. police, army, civil servants.
Marks are for a neat tree diagram with every branch labelled.