Idk

Question 1

Division of labour

Answer 1

Splitting the production process into multiple stages and assigning labour to one stage

Question 2

Advantages of division of labour

Answer 2

More efficient :

• less training
• less time wasted with labour moving onto the next stage of the production process

Can make labour more productive:
Can choose the job best tailored to their skills

Question 3

Negatives of division of labour

Answer 3

Can be less productive as labour gets bored of the same task and loses moral

Can be more mistakes

If there’s a problem in one area then all production will cease to a halt

Question 4

Why does specialisation require an efficient means of trade

Answer 4

So that countries that have large supplies of raw materials can export them and make use of their reserves

And countries that need raw materials but cannot produce them are able to consume them

Furthermore it increases competition and monopolies will face international competition and may have to reduce prices and be efficient

Question 5

Long run v short run

Answer 5

Long run - all factors of production are varied

Short run- at least one FOP is fixed

Question 6

Returns to scale

Answer 6

The rate by which output changes when the scale of all factors of production change

Increasing returns to scale= when the scale of the FOPs increase, output increases at a FASTER RATE

decreasing returns to scale- when the scale of FOPs employed increases, output increases at a slower rate

Constant returns to scale= when the scale of all the FOPs increase, output increases at the same rate

Question 7

Minimum efficient scale

Answer 7

The lowest output at which the firm is able to produce at the minimum achievable LRAC

Question 8

Economies of scale

Answer 8

As output rises, long run average costs decrease

Internal economies/diseconomies of scale= changes in long run averse costs of production resulting in changes from the size of the plant or firm

External economies/diseconomies of scale= a change in the long run average costs of production resulting from a change in the market or industry of which the firm is a part of

Question 9

Creative destruction

Answer 9

Old industries and firms, which are no longer profitable, close down enabling the resources (capital and labour) to move into more productive processes

Creative destruction means that company closures and job losses are good for the long term well being of the economy