a) Outline five problems of barter trade.
b) Explain to Domingo five benefits of using computers in the conduct of his business.
Explanation
(a) The problems of barter include:
- Double co-incidence of wants;
- No fixed rate of interest;
- Wastage of time and effort;
- Indivisibility of goods;
- Discouraging borrowing and lending/no deferred payment;
- Difficulty in storing wealth;
- Bulkiness of goods;
- Measurement of value of goods.
(b) Benefits Domingo could derive by using computers in the conduct of his business:
- He could use a computer to communicate with his suppliers and customers through email faster;
- The use of spread sheet and accounting software could help him to keep his accounts better than doing it manually (accurate and reliable data);
- He could search for cars available for sale as well as potential buyers through the internet on the computer;
- The use of computer reduces the time and cost of doing business;
- Information about suppliers, debtors and potential customers could be stored in the computer for ease of retrieval;
- Diagnostics of the state of vehicles he purchases could be done by using a computer system/ to detect problem;
- He could use a computer to transfer funds as well as know the state of his accounts;
- He could use a computer to secure his premises through the use of close circuit television (CCTV);
- He could use a computer to monitor his vehicles with the help of tracking device installed in the vehicle in case of theft;
- He could use computer for confidentiality as access to information is not possible without the knowledge of the password;
- Data processed on the computer are more accurate and reliable than the one manually done