Productivity and Division of Labour Flashcards
Define productivity
Productivity is defined as the output per unit of input over a given period of time
What is a labour intensive market
A labour intensive market is one where mostly humans are used in the production process
What is a capital intensive market
A capital intensive market is one where mostly machines are used in the production process
What is production
Production is the process of turning inputs into finished gooods
Define labour productivity
Labour productivity is the average output per worker
What is the equation for the average product of labour
Average product of labour = Total output / Number of employees
How can firms increase the productivity of labour
1) Training workers
2) Performance related bonuses
3) Encouraging workers to buy shares in the firm
4) Increasing job satisfaction
5) Upgrading old machinery
6) Introducing new production process that reduce waste, improve quality and increase output
7) Introduce division of labour
How can firms increase the productivity of land
1) The use of fertilizers and pesticides: Fertilizers are chemicals given to plants that improve their health and raise crop yields
2) Irrigation: Irrigation is the process of redirecting water from natural sources to land that needs more of it to become productive
Drainage: Drainage can be used to improve the flow of water of land that is unproductive due to the fact that it is flooded
What are some advantages and disadvantages of using capital to increase productivity
Advantages:
Increase in output
Reduction of waste
Disadvantages:
Equipment should be updated
Maintenance of machinery regularly
How can capital be used in each sector
Primary sector: Tractors
Secondary sector: Robots
Tertiary sector: Internet shopping
What are some limitations to increasing productivity
Availability of finance
Demand for the final product
Willingness of firms
Define division of labour
Division of labour is a system where production is broken down into a number of simpler more specialized tasks and each worker specializes in doing a particular one
Define specialization
Specialization is a system of organization where economic units are not self-sufficient but concentrate on producing certain goods and services and trade their surplus with others
What are the advantages and disadvantages of division of labour to firms
Advantages:
1) Increase in productivity: With division of labour, workers do the same task all day instead of doing multiple tasks. This constant repetition of a tasks helps them become experts at their jobs and they therefore can do it much faster and better, resulting in an increase in productivity
2) Use of specialized machinery: Division of labour breaks production down into a number of simpler more specialized tasks. Since this tasks are simpler they can be performed by machines. Machines are much more productive than humans as they don’t take breaks or get tired. Thus, they are able to produce more goods, increasing productivity
3) Less mistakes
4) Less production time
Disadvantages:
1) Worker motivation falls
2) Interdependence
What are the advantages and disadvantages of division of labour to workers
Advantages:
1) Higher wages as they become more skilled
2) Only do jobs they are good at and enjoy
Disadvantages:
1) Work becomes boring
2) Repetitive task can cause health issues to joints
