Nature and the subject matter of commerce

i. Goods: Things which we can see and touch. Example: Pen, books, tractor

ii. Services: Things which we cannot see or touch but help in daily life. Example: Education, hairdressing, medical care

iii. Needs: Essential things that a person must have in order to live. Example: Food, shelter, clothes

iv. Wants: Things that are not essential for survival but make life more enjoyable. Example: TV, radio, car, mobile phone

v. Distribution: The process of making goods and services available to the final consumer.

vi. Exchange: The act of buying and selling goods and services.

• Exchange constitutes trade
• Exchange is mostly done using money as a medium

vii. Producer or Seller: A person who works or produces goods/services for payment. Example: Doctors, teachers, farmers, shopkeepers

viii. Consumer or Buyer: A person who buys goods or services. Note: Everyone is a consumer

• Food
• Clothes
• Shelter

1. Unlimited: Human wants never end. After satisfying one, another appears. Example: A person may want a shirt, then trousers, then shoes, and so on.

2. Satisfied: We can satisfy some of our wants depending on the resources we have. Example: If you don't have enough money, you can only buy a few things.

3. Complementary: Some wants go together. If you have one, you also need the other. Examples:

   • Car and petrol
   • Radio and batteries
   • Tea and sugar

4. Competitive: Due to limited resources, we have to choose which want to satisfy first. Example: Choosing between buying a bag or buying shoes.

5. Alternative: There are different ways to satisfy a want. Examples:

   • You can travel by plane or train
   • You can use butter or cheese
   • You can drink tea or coffee
   • You can write with a pen or pencil