ZIMSEC O Level · Commerce · Form 3
Production is creating goods and services to satisfy human wants.
Types of production
- Primary: extracting natural resources (farming, mining, fishing, forestry).
- Secondary: turning raw materials into goods (manufacturing, construction).
- Tertiary: services, divided into commerce (trade and aids to trade) and direct services (teachers, nurses, police).
Commerce
Commerce covers all activities that help move goods from producers to consumers:
- Trade: home trade (retail and wholesale) and foreign trade (imports and exports).
- Aids to trade: banking, insurance, transport, warehousing, communication and advertising. Each removes a barrier – for example, transport removes the barrier of distance; warehousing removes the barrier of time.
Specialisation and the division of labour
Workers concentrate on one task. Advantages: higher output, greater skill, use of machines. Disadvantages: boredom, dependence on others, unemployment if demand falls.
Factors of production
Land (reward: rent), labour (wages), capital (interest), entrepreneurship (profit).
Exam tip: Match each aid to trade with the barrier it removes – a classic exam question.
Check yourself
- Classify: a bank clerk, a gold miner, a furniture maker.
- Which aid to trade removes the barrier of risk?
- Give two disadvantages of the division of labour.
Show answers
- Tertiary (commerce); primary; secondary.
- Insurance.
- Any two: boredom, loss of skills/craftsmanship, dependence on others, unemployment.
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