JAMB Commerce Note- Meaning and Scope

(i) Meaning and Scope of Commerce

Commerce refers to all activities involved in the exchange of goods and services to satisfy human wants. It is a branch of production that deals with the distribution and exchange of goods and services.

Scope of Commerce

Commerce covers two broad areas:

1. Trade: The buying and selling of goods and services.

Home Trade: Involves buying and selling within a country (e.g., wholesale and retail trade).

Foreign Trade: Involves trade between two or more countries (e.g., import, export, and entrepôt trade).

2. Aids to Trade: These are activities and services that facilitate trade. Examples include:

Transportation: Moves goods from producers to consumers.

Banking: Provides financial services to facilitate trade.

Insurance: Protects goods and businesses from risks.

Advertising: Promotes goods and services to potential buyers.

Warehousing: Stores goods until they are needed.

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(ii) Characteristics of Commerce

1. Exchange of Goods and Services: Commerce involves the transfer of goods and services from producers to consumers.
2. Profit-Oriented: The primary aim is to make a profit.
3. Bridges the Gap: Commerce connects producers and consumers.
4. Involves Aids to Trade: Commerce relies on services like transportation, banking, and insurance.
5. Encourages Specialization: Producers can focus on production while traders handle distribution.
6. Dynamic Nature: Commerce evolves with changes in technology and market demands.
7. Global Impact: Commerce extends beyond local and national markets to international trade.

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(iii) Functions of Commerce

1. Facilitating Exchange: Ensures goods and services move from producers to consumers.
2. Improving Standard of Living: Commerce makes goods and services readily available to meet human needs.
3. Creation of Employment: Provides jobs in areas like trade, banking, transportation, and advertising.
4. Promoting Specialization: Encourages producers and traders to focus on specific tasks, improving efficiency.
5. Generation of Revenue: Governments earn revenue through taxes on commercial activities.
6. Promoting International Relations: Encourages trade between countries, fostering global partnerships.
7. Storage of Goods: Warehousing ensures goods are available when needed.

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10 JAMB Objectives Questions

1. What is the primary aim of commerce?

A) To provide employment

B) To make a profit

C) To store goods

D) To promote advertising

2. Which of the following is an aid to trade?

A) Production

B) Consumption

C) Transportation

D) Marketing

3. Commerce is a branch of:

A) Production

B) Consumption

C) Distribution

D) Banking

4. Which of the following is not part of the scope of commerce?

A) Trade

B) Aids to trade

C) Industrial production

D) Foreign trade

5. The process of storing goods until they are needed is known as:

A) Advertising

B) Transportation

C) Warehousing

D) Banking

6. A major characteristic of commerce is that it:

A) Focuses on local trade only

B) Involves exchange of goods and services

C) Is independent of technology

D) Does not encourage specialization

7. The aspect of trade that involves the buying and selling of goods between countries is called:

A) Home trade

B) Wholesale trade

C) Foreign trade

D) Retail trade

8. Commerce promotes international relations by:

A) Encouraging specialization

B) Storing goods for future use

C) Facilitating trade between nations

D) Increasing employment locally

9. Which of these best describes aids to trade?

A) Activities that assist production

B) Activities that facilitate exchange

C) Activities that generate revenue

D) Activities that improve transportation

10. Governments earn revenue from commerce through:

A) Specialization

B) International relations

C) Taxation

D) Warehousing

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