Economics Paper 2, WASSCE (SC), 2023

Question 6

 

  1. Define location of industry.
  2. Explain how the following factors influence where a firm is sited:
    (i)         raw materials;
    (ii)        market;
    (iii)       government policy.
  3. Outline three advantages of localization of industry.

  Observation

This question was not popular among the candidates and their performance was below average. Majority of them confused location of industry with localization of industry in the (a) part. The (b) part also proved difficult for most of the candidates, the influence of the listed factors on the location of a firm was not answered well.  Some of the candidates were able to give relevant benefits of localization of industry in the (c) part of the question, however the points raised were not developed adequately.
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Candidates were expected to answer thus to score maximum marks in this question.

  1. Location of industry refers to the siting of a firm in a particular area to minimize the cost of production based on certain factors.
  2. (i) Raw materials:
    If the raw material used is quite bulky or perishable, transporting it over a longer distance is much expensive or risky and so firms will site their factories near the source of raw materials to reduce transportation costs e.g. wood and mining companies, food processing and fish farming firms etc. are located near the raw material.
    (ii) Market:
    Where finished products are highly perishable, bulky or fragile such that damage will be done to them in the process of transporting them, firms are located very close to the market e.g. glasses, tiles, etc.

(iii) Government policy:
Governments may want to ensure even development or fulfill campaign promises by siting a firm in a particular area through its policies or laws e.g. industrial estates. This choice is often made without giving any consideration to its economic implication.

Labour already employed can easily acquire new skills which will be useful in other firms.
(ii) New firms can tap the expertise of old ones when it comes to training.
(iii) Subsidiary firms that can use the by-products of established firms will emerge.
(iv) Firms can co-operate and buy raw materials in bulk to reduce per unit cost or support one another in times of need.
(v) It facilitates division of labour and specialization where different parts of a product e.g. equipment, is produced by different firms.
(vi) Common problems are identified and a joint research unit can be formed to help solve problems that will arise e.g. internet services, accessibility, security etc.
(vii) More jobs are created for the people where an industry is localized and this helps to improve the standard of living of the people.
(viii) A localized industry easily attracts government attention for the provision of infrastructure.
(ix)        It helps in the development of areas where they are localized through the provision of housing estates, schools, market, electricity etc.
(x) Skilled labour is employed by the firms at competitive rates.