(a) What are capital goods. (b) Explain the problems associated with the distribution of goods...
(a) What are capital goods.
(b) Explain the problems associated with the distribution of goods in your country.
Explanation
(a) Capital goods are goods desired not for direct use but for the assistance they give in the further production of other goods. They, therefore do not satisfy human wants directly. They include machinery, plants vehicles etc.
(b) The problems of distribution are:
(i) poor transportation
(ii) hoarding: some middlemen do this. This creates artificial scarcity.
(iii) numerous middlemen which results in unduly high prices and this affect demand.
(iv) absence of large market — the markets are fragmented into bits by retailers
(v) There is inadequate storage facilities particularly for perishable commodities inadequate credit facilities can affect distribution network administrative bottlenecks do disrupt the distribution process and hinder spread of the goods.
(viii) smuggling of goods out of the country is a big problem.