NECO 2005 Economics · Question 9
Production is said to be complete when goods and services gets to the
Options
- A.consumers
- B.distributors
- C.retailers
- D.warehouses
- E.wholesalers
Answer: A. consumers
Explanation written with AI and checked against the answer key
Step 1: Analyze the question The question asks at what point production is considered complete. In economics, this depends on the definition of production.
Step 2: Explain the concept Production is the creation of goods and services to satisfy human wants. It does not stop when a product is manufactured. It includes every stage that adds utility (usefulness) to a product:
- Form utility: manufacturing, which turns raw materials into finished goods
- Place utility: transporting goods to where they are needed
- Time utility: storing goods until they are needed
- Possession utility: transferring goods to the person who will use them
The chain of production runs like this:
Primary production → Secondary production (manufacturing) → Tertiary production (distribution, transport, banking, insurance, retail)
Step 3: Work through the options
- B, C, E (distributors, retailers, wholesalers): These are intermediaries in the chain of distribution. The goods are still on their way, so production is not yet complete.
- D (warehouses): A warehouse is only a storage point. It adds time utility, but the goods have not reached the people who will use them.
- A (consumers): Only when the goods and services reach the final users, the consumers, is the process complete and want satisfaction achieved.
Step 4: Answer Production is complete when goods and services get to the consumers.
Tip: Remember the phrase "Production ends where consumption begins." If a question asks when production is complete, think of the final user, not the middlemen.
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