Factors of Production
44 questions· page 1 of 5
When is division of labour likely to be most effective?
Options
A in a large market with stable demand
B in a market where consumers prefer a handmade product over a product made using machines
C in a market where consumers require a variety of goods
D in a small market where consumers require a custom-made product
A country increases its spending on education and training. It pays for this by reducing unemployment benefit payments and increasing taxes on imports of machinery.
What is the likely effect of these changes?
Options
| human capital | physical capital | |
|---|---|---|
| A | decreases | decreases |
| B | decreases | increases |
| C | increases | decreases |
| D | increases | increases |
What is the most likely benefit of specialisation to a firm?
Options
A increase in motivation of employees
B increase in imports from other countries
C increase in the number of employees
D increase in the level of output
What is meant by the division of labour?
Options
A A process is split into a series of individual tasks.
B Some workers work part-time and others work full-time.
C The same amount of output per hour is produced by each worker.
D Wages are divided equally between workers.
Which combination correctly identifies the rewards to each factor of production?
Options
| capital | enterprise | labour | land | |
|---|---|---|---|---|
| A | interest | profit | rent | wages |
| B | interest | profit | wages | rent |
| C | profit | interest | wages | rent |
| D | rent | wages | interest | profit |
The nature of a typical car assembly plant has changed. The industry has fewer firms, operates on larger sites and has more automated machinery.
How is this change most likely to have affected the relative use of factors of production in the industry?
Options
| increased relative use | decreased relative use | |
|---|---|---|
| A | capital and enterprise | labour and land |
| B | enterprise and labour | land and capital |
| C | labour and land | capital and enterprise |
| D | land and capital | enterprise and labour |
Which item would be least likely to be classed as land?
Options
A fertilisers
B fisheries
C forests
D coal
What will encourage a higher degree of division of labour?
Options
A firms wishing for a greater level of self-sufficiency
B firms wishing to increase their flexibility in production
C firms wishing to raise their level of productivity
D firms wishing to reduce their level of risk
In a clothing business, after specialisation, real output per worker increased in the first six months but then output per worker began to fall.
What might be the most likely reason for the reduction in productivity?
Options
A An increase in output per worker in the long run depends on an increase in pay.
B An increase in output per worker requires more capital.
C Specialisation means workers lose skills.
D Workers get bored if they are repeating the same work.
A wine producer and bottler wanted to expand its production significantly. To finance the expansion it offered investors discounts on restaurant meals if they bought 2000 shares in the company.
Which factors of production are most likely to be involved in this expansion?
Options
A labour, land, capital and enterprise
B labour, land and capital only
C enterprise and land only
D enterprise only