Firms & Production Flashcards
(10 cards)
1
Q
Derived demand
A
Factors of production blue demanded for own sake but for good and services it produces
2
Q
Labor intensive production
A
Cost of labor higher than cost of any factor of production
3
Q
Capital intensive production
A
Use of capital greater than other factors of production
4
Q
Decide between labor and capital intensive
A
- cost of labor and capital
- size of market
- firms objective
5
Q
Reasons for capital intensive
A
- can’t just get mass protection techniques
- unit cost pretty production low
- reasons for labor intensive
6
Q
Reasons for labor intensive
A
- to make individualized products
- workers skilled, quality of pretty inc
7
Q
Production
A
Total output of goods and services in production
8
Q
Productivity
A
Measure of efficiency by calculating amount of output per unit of input
9
Q
Why is high productivity important
A
- economies of scale
- improved competitiveness
- higher profits
10
Q
Factors affecting rate of productivity growth
A
- innovation
- skills and experience
- competition
