Theory question 103
Distributive TradeSection B (answer four questions only from this section)
(a) What are capital goods?
(b) Explain the problems associated with the distribution of goods in your country.
Show the model answer
Model answer
(a) Capital goods are man-made goods used to produce other goods and services rather than for direct consumption, e.g. machines, tools, factory buildings, vehicles.
(b) Poor roads and transport facilities.
Inadequate storage and warehousing facilities, leading to losses of perishables.
Too many middlemen, raising prices.
Hoarding and artificial scarcity.
Inadequate finance/credit for traders.
Poor communication and market information.
Insecurity (armed robbery) on the roads.
Multiple levies and checkpoints.
Poor packaging and preservation facilities.
Explanation
Explain each problem briefly.