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 coincidence 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;
- The bulkiness of goods;
- Measurement of the 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 spreadsheet 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 computers 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 problems;
- 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 a tracking device installed in the vehicle in case of theft;
- He could use the 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.