4.1.4 - production costs and revenue

Question 1

production

Answer 1

converting inputs(e.g raw matierals/labour) into outputs (products/services to sell)

Question 2

what are inputs and two types

Answer 2

inputs - four factors of production
tangible - e.g raw matierals
intangible - e.g ideas

Question 3

productivity - output per factor employed

Answer 3

way of measuring how efficentley a company or economy is producing its outputs (output per unit employed)

Question 4

how to calculate labour productivity - output per worker / output per hour worked

Answer 4

output/ total workers or hours worked

Question 5

why do u calculate labour productivity

Answer 5

to compare against other workers

Question 6

how to improve labour productivity

Answer 6

better training , improved technology and specialization.

Question 7

specialisation

Answer 7

the concentration of a worker/firm/region/country to produce a narrow range of goods and services

Question 8

what does specialization require to be successful?why?

Answer 8

Trade as it allows us to sell the specialised products but also because it lets us import other goods which we dont specialise in.

Question 9

what does specilisation reduce

Answer 9

problem of scarcity - asthey are maximising the use of their recources (FOP) given to them. the recources they dont have to make certain products (e.g in the Uk we dont have the correct weather/soil to make bananas ) they can simply import products such as bananas (from countries like India and Brazil) so they dont have to worry about the product being scarce.

Question 10

Advantages of specilisation(3)

Answer 10

• larger range of goods/services
• greater output+ quality
• trade and growth

Question 11

explain the advantage of specilisation - larger range of goods and services

Answer 11

when different firms specialize in different products , in total it would add up to a large range.

Question 12

explain the advantage of specilisation - trade and growth

Answer 12

• more exporting - more growth - increasing living standards - people become materially richer

Question 13

disadvantages of specilisation (5)

Answer 13

• finite resources
• over reliance on good weather
• changing tastes/fashion
• national interdependence
• de- industralisation

Question 14

explain the disadvantage of specilisation - finite resources

Answer 14

when a country/firm speciliase in a certain product they are dependent on specific recources but raw matierals (e.g rubber or copper) are finite and therefore will eventually run out , their specilisation wont be worth it if the recources required to create that product is not available.

Question 15

explain the disadvantage of specilisation - over reliance on good weather

Answer 15

e.g industries such as tourism are heavily reliant on good weather. e.g agriculture.

Question 16

explain the disadvantage of specilisation - national interdependence.

Answer 16

countries become more closely linked to each other as they are reliant on each others specilaised products but if their relations break out perhaps due to war, political problems , then trade will be restricted or totally stopped.

Question 17

explain the disadvantage of specilisation - de industralisation

Answer 17

e.g Britain, during the industrial revolution, specilalised in manufactured goods . However after 5-10 years other countries such as China or other European countries may be able to produce better goods, so their specialisation is greater than Britans which meant that the maufracturing industry closed down and workers lost their jobs which meant that they may be in long term unemployment as they only have limited skills but this also meant that then had unemployed recources and labour which is a cost to the economy.

Question 18

division of labour

Answer 18

ocurrs when specialisation has taken place where the production process is broken down into seperate tasks

Question 19

what are advantages of division of labour

Answer 19

• workers get better at their jobs
• production increases
• time saving
• cost effective capital for workers
• consumers benefit

Question 20

explain the advantage of division of labour - workers get good at their jobs

Answer 20

improve - feel valued in the short term

Question 21

explain the advantage of division of labour - production increases

Answer 21

workers improve - production increases - productivity increases - output increases

Question 22

explain the advantage of division of labour - time saving

Answer 22

by splitting the production process into different production lines - time is saved - reducing costs

Question 23

explain the advantage of division of labour - cost effective capital for workers

Answer 23

increasing efficency - cost effective.

Question 24

explain the advantage of division of labour - consumers benefit

Answer 24

-increasing productivity - more goods produced in the same period of time - decreasing cost of producing - decreasing price for consumers.

Question 25

what are the disadvantages of division of labour ( 3)

Answer 25

- boredom (long term) - payments are low/ working conditions are poor - too much reliance on other countries

Question 26

explain the disadvantage of division of labour - boredom

Answer 26

in the long term workers feel devalued - no motivation - decreasing productivity - quality may suffer

Question 27

explain the disadvantage of division of labour - payments are low / poor working conditions

Answer 27

e.g factories in China or south east asia , workers are in bad working conditions. they may be working in crammed spaces , long working hours yet are paid low.

Question 28

explain the disadvantage of division of labour - too much reliance on other countries

Answer 28

e.g if u want low skilled workers and cheap labour then you are reliant on countries such as china, bangladesh , india,e.t.c . then you are reliant on those countries work force.

Question 28

explain the disadvantage of division of labour - too much reliance on other countries

Answer 28

e.g if u want low skilled workers and cheap labour then you are reliant on countries such as china, bangladesh , india,e.t.c . then you are reliant on those countries work force.if that relationship breaks down then you will not have the labour to produce the goods. or if u are reliant on exporting goods to other countries and if this relationship breaks down then you wont be able to run your business and your labour will be unemployed they will probably be long term unemployed as they have specialize too much in one skill so they dont have abroad skill set making it harder to find a job.