Efficiency

Question 1

To maximise efficiency a firm must have the correct mix of

Answer 1

1. Workers

2. Machinery and Equipment

Question 2

If a business is labour intensive

Answer 2

1. Relatively few machines are needed
2. This is common when
   > specialist skills are required
   > in service sector

Question 3

If a business is capital intensive

Answer 3

1. business replies upon more machinery
2. This is common
   > where identical products are produced

Question 4

Equation for productivity

Answer 4

Number of goods produced
Divided by
Number of workers