(a) Describe five factors that determine the choice of means of transportation for goods (b) Explain five factors that have contributed to the growth of Com...

Answer Details

(a) Five factors that determine the choice of means of transportation for goods

1. Nature of the goods: perishable, fragile or bulky goods require special or faster means, for example air or refrigerated transport for perishables.
2. Cost of transportation: the trader compares the charges of the various means and chooses the one that is economical relative to the value of the goods.
3. Urgency/speed required: where goods are needed quickly, a fast means such as air transport is chosen; where time is not pressing, cheaper and slower means are used.
4. Distance to be covered: short distances may favour road transport, while long overseas distances favour sea or air transport.
5. Availability of the means and route (accessibility): the trader chooses a means that is available and whose route reaches the destination, for example road where there is no rail line.

(b) Five factors that have contributed to the growth of Commerce

1. Improved transportation: faster and cheaper transport by road, rail, sea and air has widened markets and eased the movement of goods.
2. Development of banking: banks provide finance, safe custody and easy means of payment, which encourage trade and commercial activity.
3. Growth of communication: telephones, internet and postal services make it easy to place orders and pass information quickly between traders.
4. Provision of insurance: insurance covers commercial risks such as fire and theft, giving traders the confidence to expand their businesses.
5. Use of money and improved currency: a common medium of exchange has removed the difficulties of barter and made buying and selling easy, boosting commerce.