Firms & Production (Cambridge (CIE) IGCSE Economics)

Exam Questions

1 hour31 questions
1
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1 mark

What does productivity in economics refer to?

  • The total revenue earned by a company in a year

  • The number of employees working in a firm

  • The amount of outputs to inputs in the production process

  • The amount of profit generated by a business

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2
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How can an increase in productivity benefit a business?

  • By reducing the number of employees required

  • By decreasing the demand for its products

  • By increasing costs and lowering profitability

  • By producing more output with the same amount of input

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3
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How does technology improve productivity?

  • Technology has no impact on productivity

  • Technology can lead to decreased efficiency

  • Technology can enhance efficiency and output

  • Technology only affects managers decisions

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4
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Which of the following examples is derived demand?

  • The demand for entertainment services

  • The demand for clothing and fashion items

  • The demand for labour in the construction industry

  • The demand for personal electronics

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5
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Which of the following is not a disadvantage of labour intensive production?

  • The firm may find it difficult to recruit workers when needed & letting go of staff when they are not required is unpopular

  • The firm can adjust the number of workers hired as demand for its goods/services fluctuate

  • Each worker requires both wage & non-wage benefits, which can prove expensive for the firm

  • The more skilled the labour required, the higher the wage bill for the firm will be

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11 mark

All countries need to produce food.

Which type of agriculture would make the best use of the resources of developing and developed economies?

 

developing

developed

A

B

C

D

capital-intensive

capital-intensive

labour-intensive

labour-intensive

capital-intensive

labour-intensive

capital-intensive

labour-intensive

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    21 mark

    What is the main difference between capital-intensive production and labour-intensive production?

    • the market structure of the production process

    • the output that the production process creates

    • the resources on which the production relies

    • the size of the firm that uses the production process

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    3
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    How might an increase in workforce education levels impact productivity growth?

    • It could lead to decreased technological innovation

    • It might reduce overall labor force participation

    • It could result in a more skilled and adaptable workforce

    • It might lead to decreased demand for goods and services

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    4
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    Which factor will lead to long-term productivity growth in an economy?

    • A decrease in technological advancements

    • An increase in regulations and bureaucratic processes

    • Growth in human capital through education and training

    • A decrease in capital investment

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    5
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    How might a decrease in the demand for cars impact derived demand for steel used in car manufacturing?

    • It could lead to decreased derived demand for steel due to reduced car production

    • It might lead to increased derived demand for steel as manufacturers look to reduce costs

    • It would have no impact on derived demand for steel

    • It could lead to increased derived demand for steel as alternative materials are sought

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    11 mark

    The table shows units of output, value of output and number of people employed in an industry over three years.

     

    output (units, millions)

    output value ($ millions)

    number employed (000)

    year 1

    year 2

    year 3

    10

    21

    32

    10

    25

    40

    5

    7

    8

    What can be concluded from the table?

    • Inflation has increased.

    • Productivity has increased.

    • Profit has increased.

    • Working population has increased.

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    2
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    What might cause a decrease in the price of factors of production?

    • Increased demand for the final goods and services

    • A shortage of labour and other inputs

    • Reduced costs of production materials

    • Technological advancements that reduce the need for labour

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    3
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    How might government policies impact the availability of factors of production?

    • Government policies have no influence on factor availability

    • Government interventions can increase factor scarcity

    • Favorable policies can lead to improved factor availability

    • Government policies only affect consumer goods prices

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    4
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    The diagrams below show the demand and supply for tyres and rubber. Which of the following statements describing the diagrams is correct?

    3-6-1-demand-for-factors-of-production
    • In the tyre market, the increased demand for tyres is represented by a shift in the demand curve from D1 to D

    • Rubber is a natural resource (land) & there is now decreased demand from the firm for rubber in order to meet higher levels of tyre production

    • The demand for tyres is derived demand from the demand for rubber

    • If a tyre manufacturer benefits from increased demand for their tyres, they will require less rubber to meet the demand

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    5
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    What impact might a capital-intensive approach have on production costs?

    • It would lead to lower initial investment costs

    • It would result in higher ongoing labour costs

    • It would decrease the need for energy consumption

    • It would lead to unstable production processes

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