chapter 10 - productivity

Question 1

capital intensive

Answer 1

a business process or an industry that requires large amounts of investments and other capital equipment to produce a good or service

Question 2

GDP per capita

Answer 2

the value of the final output of goods and services on an economy per person. can provide a measure of a countries efficiency

Question 3

human capital

Answer 3

refers to the workers who are employed by a firm and their productivity can be improved through investment

Question 4

Labour intensive

Answer 4

a process or industry that requires a large amount of labour to produce its goods or services

Question 5

productive of technical efficiency

Answer 5

producing the largest possible output from the available resources

Question 6

productivity

Answer 6

measures the relationship between inputs into the production process and the resultant outputs

Question 7

productivity gap

Answer 7

output per worker employed in the UK remains well below that of many of our major international competitor countries

Question 8

unit cost

Answer 8

measures the average cost per unit produced, as measured over a particular time period

Question 9

unit cost calculation

Answer 9

total costs in a period ÷ total output in a period

Question 10

3 ways to measure productivity

Answer 10

1. output per worker in a given time period
2. output per hour, day, week
3. output per machine in a given time

Question 11

3 choices arising from higher productivity

Answer 11

1. make a higher profit per unit sold
2. offer customers a lower price than competitors
3. raise quantity

Question 12

4 factors affecting workers pay

Answer 12

1. specialisation ( scarcity of skills)
2. the industry they work in ( the value added )
3. the levels of demand for their service or industry
4. levels of discrimination that occur

Question 13

3 ways to improve human capital

Answer 13

1. education, training and health
2. motivation
3. management training

Question 14

2 ways to improve enterprise

Answer 14

1. research and development
   
   • new products and procedures
   • improvement of existing products
2. market research
   
   • market orientation
   • the focus on non price competition in markets will drive product innovation and creative destruction

Question 15

1 way to improve capital

Answer 15

using more advanced capital machinery
- automation
- robotics
- better quality raw materials
- less wastage
- r and d creates better processes

Question 16

1 way to improve capital within a firms cash flow system

Answer 16

changes in the levels of investment
- pay higher wages for more skilled staff
- buy more or better equipment
- acquire another business or bigger premises

Question 17

5 possible supply side reasons for the productivity gap

Answer 17

1. low rate of new capital investment
2. banking skills affecting lending to businesses who want to expand
3. possible slowing rates of innovation
4. persistent and deep skill shortages in key industries
5. low aggregate demand and high space capacity