4.1.4.1 Production and productivity

Question 1

What does production involve?

Answer 1

Converting inputs such as raw material or labor into outputs with an exchangeable value.

Question 2

What is productivity?

Answer 2

The output per unit of input employed.

Question 3

What is division of labor?

Answer 3

A type of specialization where production is split into different tasks and specific people are allocated to each task.

Question 4

What does specialization mean for trade?

Answer 4

Specialization makes trade vital since its important to be able to obtain the things a country is no longer making them selves.

Question 5

What is a barter system?

Answer 5

Swapping goods with other countries.

Question 6

What is the issue with a barter system?

Answer 6

Its very inefficient since it takes a lot of time and effort to find traders to barter with.

Question 7

What’s the most efficient way of exchanging goods/services?

Answer 7

Using money as a medium of exchange.

Question 8

What three functions does money have apart from a method of exchanging goods and services?

Answer 8

A measure of value.
A store of value. (Individual receiving money can keep their money and buy something in the future)
A method of deferred payment. (Debt)