Ch.4 Production and Division of Labour

Question 1

What are the types of goods?

Answer 1

Producer goods, consumer goods, private goods and public goods.

Question 2

What are producer goods?

Answer 2

Producer goods are goods used in a production process to produce other goods and services. It does not directly satisfy human wants.

Question 3

What are consumer goods?

Answer 3

Consumer goods are goods used for final consumption. They directly satisfy human wants.

Question 4

What are private goods?

Answer 4

Private goods are goods which are both rival and excludable in consumption.

Question 5

What does rival in consumption mean in private goods?

Answer 5

A good is rival in consumption if the amount available to others is reduced once a person consumes the good. It means that it is cannot be consumed concurrently by many individuals at the same time without reducing the amount available for other persons.

Question 6

What does excludable in consumption mean in private goods?

Answer 6

A good is excludable in consumption if it is possible to prevent others from using the good.

Question 7

What are public goods?

Answer 7

Public goods are goods which are both non-rival and non-excludable in consumption. Their consumption is concurrent in nature.

Question 8

What does non-rival in consumption mean in public goods?

Answer 8

A good is non-rival in consumption if consumption of the good by one person does not reduce the amount available to others. The good can be equally available to all individuals, and consumed by many individuals concurrently.

Question 9

What does non excludable in consumption mean in public goods?

Answer 9

A good is non-excludable in consumption if it is costly to exclude others from consuming the good.

Question 10

What is production?

Answer 10

Production is the process of turning inputs into outputs.

Question 11

What is input called?

Answer 11

Input used in production are called factors of production. They include different kinds of resources, namely human resources, natural resources and man-made resources.

Question 12

What does the output of production include?

Answer 12

It include both goods and services.

Question 13

What are the types of production?

Answer 13

Primary, secondary and tertiary production.

Question 14

What is the definition of primary production?

Answer 14

Primary production refers to those activities that extract raw materials from nature.

Question 15

What is the definition of secondary production?

Answer 15

Secondary production refers to those activities that turn raw materials into semi-finished goods or finished goods.

Question 16

What is the definition of tertiary production?

Answer 16

Tertiary production refers to those activities that provide different kinds of services.

Question 17

Use an adjective to describe the three types of production.

Answer 17

The three types of production are independent.

Question 18

How do secondary and tertiary production rely on primary production?

Answer 18

Primary production provides raw materials and foodstuffs for secondary and tertiary production.

Question 19

How do primary and tertiary production rely on secondary production?

Answer 19

Secondary production provides producer goods, such as machinery and tools for primary and tertiary production.

Question 20

How do primary and secondary production rely on tertiary production?

Answer 20

Tertiary production provides different types of services, such as transport and banking services for primary and secondary production.

Question 21

Use an adjective to describe Hong Kong economy.

Answer 21

Hong Kong economy is increasingly service-oriented.

Question 22

What does the importance of each type of production depends on?

Answer 22

It depends on its percentage contribution to total employment and total value of production.

Question 23

What is division of labour?

Answer 23

It is a practice in which worker specialise in producing a good or in a stage of production of a good.

Question 24

What are the types of division of labour?

Answer 24

Simple division of labour, complex division of labour, regional division of labour.

Question 25

What is the definition of simple division of labour?

Answer 25

A worker specialise in producing a particular good.

Question 26

What is the definition of complex division of labour?

Answer 26

A worker specialises in a particular stage of a production of a good.

Question 27

What is the definition of regional division of labour?

Answer 27

A district or region specialises in producing a particular good or in a particular production stage of a good.

Question 28

What are the advantages of division of labour?

Answer 28

1. Increasing labour productivity.
2. Economy in the use of capital.

Question 29

What are the reasons of practising division of labour increasing labour productivity?

Answer 29

1. Choosing the best people to do the job.
2. Practice makes perfect.
3. Saving time on training.
4. Saving time for workers in moving around jobs.
5. Encouraging mechanism.

Question 30

Explain on choosing the best people to do the job.

Answer 30

Different people have different talents and abilities. When the most suitable person can be chosen for a job, labour’s productivity is raised.

Question 31

Explain on practice makes perfect.

Answer 31

Each worker is assigned to the same task. Skill of workers will be improved by repeating the same task and therefore productivity is raised.

Question 32

Explain on saving time on training.

Answer 32

Time is saved in training a worker because a workers needs to know only his job.

Question 33

Explain on saving time for workers in moving around jobs.

Answer 33

It saves the time of a worker would lose in passing from one stage of work to another.

Question 34

Explain on encouraging mechanization.

Answer 34

As the whole production process is divided into simple sub-processes, machines can be easily invented and used for each sub-process. Mechanization is helpful in raising productivity.

Question 35

Explain on economy of capital goods as an advantage of division of labour.

Answer 35

Fewer set of tools are needed. So division of labour enables society to save resources in producing capital goods. Specialization also enables all capital goods to be fully utilised.

Question 36

What are the disadvantages of division of labour?

Answer 36

1. Monotonous and boring work
2. Limited scope of skills.
3. Greater risk of unemployment.
4. Over-interdependence.
5. Excessive standardization products.

Question 37

Explain on monotonous and boring work.

Answer 37

Repeating the same task day after day is boring and workers cannot recognize their contribution.

Question 38

Explain on limited scope of skills.

Answer 38

As tasks are simple, workers can hardly acquire useful skills.

Question 39

Explain on greater risk of unemployment.

Answer 39

Due to limited skills, workers can hardly find other jobs if being laid off.

Question 40

Explain on over-interdependence.

Answer 40

Disruption in one production stage may badly affect the whole production.

Question 41

Explain on excessive standardization of products.

Answer 41

Mass production leads to over standardization of products.

Question 42

What are the factors limiting the use of division of labour?

Answer 42

Nature of product, size of the market, possibilities of trade.

Question 43

Explain on nature of product.

Answer 43

Complex division of labour is not desirable for work that requires individuality or highly specialized skills.

Question 44

Explain on the size of the market.

Answer 44

The extent of complex division of labour is limited by the size of market. If the market is small, the amount of output is sufficient to satisfy market demand, division of labour may not be necessary.

Question 45

Explain on possibilities of trade.

Answer 45

Restriction on trade will discourage specialization.

Question 46

What are the differences between specialization and division of labour?

Answer 46

Division of labour is a kind of specialization in labour. However, specialization may also take place in other factors.