a) State four reasons people still engage in hawking. b) Explain the four factors of production.

Answer Details

(a) Four reasons people still engage in hawking

1. Small capital requirement: Hawking needs very little money to start, so it is attractive to poor people who cannot rent a shop.
2. Unemployment: Many people take to hawking because they cannot find paid jobs, and it offers a means of survival.
3. Goods are brought to the buyer's doorstep: Hawkers move about with their goods, making it convenient for customers who have no time to visit the market.
4. No overhead costs like rent and rates: Since hawkers do not operate from fixed premises, they avoid shop rent, electricity bills and other running costs.

(Other reasons: quick sale of perishable goods, and flexibility to move to areas where demand is high.)

(b) The four factors of production

1. Land: This refers to all the natural resources or free gifts of nature used in production, such as the soil, forests, rivers, mineral deposits and climate. Its reward is rent.
2. Labour: This is the human effort, both physical and mental, applied to production. It includes the work of the farmer, teacher, doctor and factory worker. Its reward is wages or salary.
3. Capital: This refers to all man-made assets used to produce other goods and services, such as machinery, tools, factory buildings and money invested in business. Its reward is interest.
4. Entrepreneur (organisation): This is the person who organises and coordinates the other three factors, bears the risk of the business and takes major decisions. His reward is profit.