COMMERCE 101.

                                       HOME TRADE.

Hey Guys, New Day New Things and we are here to learn and understand. Let’s get started on our topic.

HOME TRADE is the act of buying and selling goods within a country. It is also known as DOMESTIC or INTERNAL TRADE. In this Home Trade the same currency is used for exchange. Home Trade comprises of:

1.      Retailing.

2.     Wholesaling.

RETAIL TRADE.

Retail Trade is the act of selling goods and services to the final consumer in small quantities. Retailing is the final link in the chain of distribution of goods and services.

The Retailer is a person whose business is to purchase goods from the wholesaler or producer in small quantity, and sell in smaller units directly to the consumer. In order words, A Retailer is any trader who directs his efforts towards selling to the final consumers for the purpose of making profit and finishing the chain of production.

CHARACTERISTICS OF RETAIL TRADE.

1.     Retailer sells in smaller units or quantities.

2.     They stock a wide variety of goods.

3.     They sell directly to the consumers.

4.     Retail Trade involves bringing the goods nearer to the consumers.

5.     They are the final link in the chain of Distribution.

6.     The Business location is open to the general consumers.

FUNCTIONS OF THE RETAILER.

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COMMERCE 101.

                                  EXCHANGE.

Hey Guys, It’s a new day to live, learn and make decisions. You have made the decision to learn today and you will not regret it because we are discussing the topic above, so sit back relax and let’s learn today.

EXCHANGE is the process of giving out value in order to have something of value in return. In the olden days Batter was the main system of exchange i.e. good for good, but nowadays one exchange money for goods. Exchange arises because of excess production of goods and services.

INTER-RELATIONSHIP AMONG PRODUCTION, SPECIALIZATION & EXCHANGE.

      Exchange is as a result of Specialization and Production. They are related in the sense that Production is enhanced by the broken down processes that are performed by different people. Division of Labor and Specialization creates room for Mass Production.

Since individuals are not capable of producing all his requirements, the need for exchange arises.

                          HISTORY OF DIVISION OF LABOR.

One of the Forefathers of Economics, Adam Smith who further explained the Theory of Division of Labor in 1776, in his book “The Wealth of Nations.” Adam Smith visited a place where Pins were made and found out that Pin-Making involved eighteen different processes at that time.

He also found out that one man was coordinating all the processes of Pin-Making alone; as a result of this rigorous and slow process he was producing 20pins per day. Adam Smith came to a conclusion that if these Eighteen Pin-Making Processes were handled by different people, more pins will be produced.

      The idea of Division of Labor thought out by Smith was applied as a result, 48,000 Pins were

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COMMERCE 101.

                       DIVISION OF LABOR.

Hey Guys, A New Day it is to learn, understand and to live. Gratitude should Therefore go to God for the Grace to see this day. Today we are concentrating on the above mentioned topic.

Division of Labor is the breaking down of  Production process into smaller duties, in order for it to be performed by more than one person and in a faster way. In Order words, when work is shared among more than one person, it is Division of Labor.

Specialization is the concentration of a worker in the performance of a particular job. A typical example, is when a person goes to the university to become a specialist in Law and then goes forward to defend people in court, that is Specialization.

ADVANTAGES OF DIVISION OF LABOR.

1.    Increase in Output- It provides more hands to do a job and thereby more result will be gotten.

2.     Time saving- It saves time by reducing time used in one process of production. For example, the harvesting of tomatoes for the making of Tomato Paste, if more than one person does it , it will be completed in no time and then it would be easier to move to the next stage of production of tomato paste.

3.     Creation of Employment- when more hands are needed, more employment will be created and more Families will move up the Financial Ladder otherwise called Standard of Living.

4.     Increases Skills- when a person does a thing continuously everyday, he/she becomes an expert at it. So it is no longer a hassle to do your duty.

5.     Encourages Specialization- Division of Labor encourages specialization because when you keep

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