MEANING, SCOPE AND FUNCTIONS OF COMMERCE

DEFINITION OF COMMERCE

Commerce is the study of production, distribution and exchange of goods and services aimed at satisfying human wants and in order to earn a living.

 

THE IMPORTANCE (FUNCTIONS) OF COMMERCE

1. It provides employment opportunities for the people.
2. It makes production and exchange of goods and services possible.
3. It improves the standard of living of people by making modern goods available.
4. It aids national and international co-operation by ensuring inter-dependence of nations
5. It facilitates division of labour and specialization.
6. It brings technological innovation and aids infrastructural development.

 

STAGES IN THE HISTORY AND DEVELOPMENT OF COMMERCE

(i)         Earliest time: – Production was subsistent in nature.

(ii)        Exchange of goods and services by barter.

(iii)       Exchange of goods and services through the use of commodity money.

(iv)       Introduction of money – notes and coins as a medium of exchange

(v)        Improvement in aids to trade.

 

EVALUATION

1. What is Commerce?
2. State four functions of Commerce .

 

FACTORS THAT DELAYED THE DEVELOPMENT OF COMMERCE  IN NIGERIA/ WEST AFRICA

1. Political instability
2. Low savings
3. Absence of developed markets
4. Poor communication system
5. Illiteracy
6. Inadequate capital
7. Low level of technology
8. Inadequate infrastructural facilities / poor infrastructural facilities
9. Low National income

 

FACTORS THAT HAVE CONTRIBUTED TO THE GROWTH OF COMMERCE IN NIGERIA/WEST AFRICA

1. Development of modern techniques of production
2. Political stability
3. Development of financial institutions
4. Development of efficient means of transportation and communication
5. Availability of warehousing facilities
6. Improvements in aids to trade e.g. Insurance, Advertising etc
7. Advancement in levels of education / literacy

 

DIVISIONS OF COMMERCE

Commerce can be grouped into two main branches or divisions namely:

1. Trade
2. Aids to trade

The aids to trade can be subdivided into:

(a)        Transport (b) Insurance (c) Banking and Finance (d) Advertising

(e)        Warehousing (f) Communication (g) Tourism

 

EVALUATION

1. Why is Commerce so essential to modern Society?
2. Set out carefully the principal divisions of Commerce and give an idea of the relative importance of each division.

 

WEEKEND ASSIGNMENT

1. The main divisions of commerce are (a) Home trade and foreign trade (b) Transportation and warehousing (c) Trade and aids to trade (d) Wholesale and Retail trade
2. Which of the following is not a benefit of commerce? It (a) Facilitates the movement of goods and services (b) Provides employment to people (c) Increases the cost of living (d) Makes funds available for business activities
3. All are aids to trade except (a) Advertising (b) Transportation (c) Retailing (d) Banking

4. Which of the following can be defined as trade and aid to trade? (a) Advertising (b) Commerce (c) Warehousing (d) Retailing
5. Which of the following is not a basic want of man? (a) Transport (b) Food (c) Water (d) Clothing

 

THEORY

1. State three ancillary services to trade .
2. Mention three ways by which transport aids trade.

 

GENERAL EVALUATION

1. What is Commerce?
2. State and explain the importance of any five ancillary services to trade.
3. Give any five advantages of advertising.
4. State five ways in which warehousing is useful to businessmen.
5. In what ways does transport aid trade.

 

See also

TERMS OF TRADE

BUYING AND SELLING DOCUMENTS

COMMODITY EXCHANGE

CO-OPRATIVE SOCIETY

LIMITED LIABILITY COMPANIES