WAEC Economics 2012 Theory — Question 5

Model answer

(a) Economic activities are activities that lead to creation of utility. People perform economic activities and they are paid for it. They earn their living through it. While economic system refers to the arrangements that define ownership and control of means of production in a society. (b)(i) Production is the process of creation of utility i.e. any activity which leads to creation of utility. (ii) Distribution is the process of moving the goods to the consumer through the channel called distribution channel. It can also mean the distribution of national income among the factors of production used to produce it. (iii) Consumption is the act of using goods and services to satisfy wants.