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Question

Difficulty: MediumMeaning and Types of Production

A commercial enterprise in Kano purchases raw hides and skins from local livestock markets and transforms them into finished leather footwear for export. Which type of economic production utility is directly generated by this manufacturing activity?

  1. A
    Place utility
  2. Form utilityAnswer
  3. C
    Time utility
  4. D
    Possession utility

Answer

Form utility is directly generated when raw hides and skins are physically processed and converted into finished leather footwear.
Form utility is created whenever raw materials or primary goods undergo industrial processing to change their physical shape or structure into finished goods.

Step-by-Step Solution

1
Analyze the production process in the given economic scenario.
The enterprise is altering the physical form of raw hides and skins to create leather footwear.
Identifying the nature of transformation helps determine the specific type of utility created during production.
2
Classify the type of utility corresponding to physical processing.
Changing the physical appearance, shape, or composition of raw materials into a finished commodity creates form utility.
Form utility is the primary outcome of secondary production activities like manufacturing and processing.

Key Concept

Types of Production Utility (Form, Place, Time, Possession)
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Topics

Meaning and Types of Production

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