NECO 2005 Economics · Question 9

Production is said to be complete when goods and services gets to the

Options

  1. A.consumers
  2. B.distributors
  3. C.retailers
  4. D.warehouses
  5. 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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