Syllabus Edition
First teaching 2025
First exams 2027
Exam code: 0455 & 0987
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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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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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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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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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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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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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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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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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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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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A firm adopts more capital-intensive methods of production.
What is the likely result?
lower productivity of capital
higher productivity of labour
fewer workers employed
greater job security for workers
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The diagram shows a firm’s average total cost (ATC) curve. At the lowest point of the curve (E), what is the firm experiencing?
economies of scale
diseconomies of scale
constant returns to scale
reduced revenue
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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 | 10 | 10 | 5 |
year 2 | 21 | 25 | 7 |
year 3 | 32 | 40 | 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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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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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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The diagrams below show the demand and supply for tyres and rubber. Which of the following statements describing the diagrams is correct?
In the tyre market, the increased demand for tyres is represented by a shift in the demand curve from D1 to D2
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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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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