Flashcards
Production and productivity
Cards in this deck (32)
- 1What is production?Converts inputs (factors of production) into outputs (goods and services)
- 2What does production involve in the short run?Adding variable factors of production to fixed factors
- 3What does production involve in the long run?All factors of production are variable so production involves changes in scale
- 4How is the short run defined?The time period where one of the factors of production are fixed
- 5How is the long run defined?The time period where no factors of production are fixed - all factors are variable
- 6What is productivity?Rate of production
- 7How is productivity measured?Output per unit of input
- 8How can productivity be measured- which is most commonly used?For all factors of production
Labour productivity output per worker - 9What is productivity a measure of?Competitiveness
- 10The higher the rate of productivity... (effect on costs) (2)the lower the unit cost of production and therefore the lower the price that can be offered to consumers
- 11What is specialisation?When we concentrate on a product or task
- 12What does the productivity gap measure?The differences in labour productivity across a number of countries
- 13Where can specialisation happen?At all levels of economic activity
- 14Give example of this (4)1) Specialisation of tasks within extended families in many of the worlds poorest countries
2) Within businesses and organisations
3) In a country
4) In a region of a country - 15Give an example of specialisation within businesses and organisationsMass manufacturing of vehicles
Building industry - 16Give an example of specialisation within a countryUSA is a leading country in shale oil and gas supplier
Bangladesh major producer and exporter of textiles - 17Give an example of specialisation within a region of a countryWest midlands has been a centre for more car assembly
- 18How can we increase productivity? (2)Better training/ management
Improved technology - 19When does the division of labour occur?Where production is broken down into many separate tasks
- 20What can the division of labour raise- why?The output per person as people become more efficient through constant repetition of a task
- 21What is this process called?Learning by doing
- 22What does this gain in productivity result in?Lower the supply cost per unit
- 23What should reduced supply costs lead to?Lower prices for consumers of goods and services causing gains in economic welfare
- 24What are advantages of specialisation? (3)1) Higher labour productivity
2) Creates surplus output that can then be traded internationally
3) Lowers prices - 25Why is higher labour productivity an advantage of specialisation? (3)Learning by doing increases output per hours worked
Higher productivity lowers the unit cost of supply
Increased productivity leads to higher profits for businesses - 26Why is the creation of surplus output an advantage of specialisation? (3)Surplus can be traded internationally
Theory of comparative advantage
Business/countries specialise in areas of relative advantage - 27Why are lower prices an advantage of specialisation? (3)Higher real incomes
Real GDP growth
Lower prices - 28What are the disadvantage of specialisation and the division of labour? (3)1) unrewarding, repetative, work that requires little skill can lower motivation, lowering quality and eventually lower production
2) Lack of flexibility- workers struggle to adapt to new jobs (structural unemployment)
3) countries can become less self sufficient- problem in trade unexpec stops - 29Why is trade and exchange necessary?For specialisation to become economically worthwhile
- 30What is a way of achieving this- what does this require?Barter was a simple method of achieving this, but requires a double coincidence of wants- larger the community the less likely this is to occur
- 31If there is a increase in specialisation what happens to productivity?Increase productivity - LRAS shifts out
Show this on a diagram - 32What is money?Money is a means of exchange that facilitates trade and exchange
Information
- Description
- Specialisation, trade and exchange, costs (avc), economies and diseconomies, returns to scale
- Created by
- Maya Khangura
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