MODULE 4

Question 1

What are the types of production?

Answer 1

1. Primary sector 2. Secondary sector 3. Service sector

Question 2

What is the primary sector?

Answer 2

Industries that extract natural resources

Question 3

What is the secondary sector?

Answer 3

Industries that fabricate or process goods

Question 4

What is the service sector?

Answer 4

Trade and information industries

Question 5

What is production?

Answer 5

The process of transforming a set of resources into a good or service that has economic value

Question 6

What are inputs?

Answer 6

The resources used in production (natural, capital, human)

Question 7

What are outputs?

Answer 7

The quantity of a good or service that results from production

Question 8

What is a labour intensive process?

Answer 8

One that employs more labour and less capital than do other processes to produce a certain quantity of output

Question 9

What is a capital intensive process?

Answer 9

Uses more capital and less labour to produce the same quantity of output

Question 10

What are explicit costs?

Answer 10

Payments made by a business to a business or people outside of it. “Accounting costs” (example: wages, buildings, machinery, and materials)

Question 11

What are implicit costs?

Answer 11

Estimates of what owners give up by being involved with a business- the owners own opportunity cost

Question 12

How is economic profit found?

Answer 12

By subtracting economic costs (both explicit and implicit) from total revenue

Question 13

How is accounting profit found?

Answer 13

Total revenue minus explicit costs

Question 14

What are the only costs accountants consider?

Answer 14

Explicit

Question 15

What is production in the short run?

Answer 15

Fixed inputs, variable inputs, average product, and marginal product

Question 16

What is the law of diminishing returns?

Answer 16

The addition of more variable input causes marginal product to fall after some point. Average product also falls after some point

Question 17

What happens if an average is rising?

Answer 17

The marginal must be above the average

Question 18

What happens if an average is falling?

Answer 18

The marginal just be below the average

Question 19

What happens if an average stays constant?

Answer 19

The marginal just equal the average

Question 20

What are costs in the short run?

Answer 20

Fixed costs, variable costs, total cost

Question 21

What is marginal cost?

Answer 21

The extra cost of producing another unit of output. It equals the change in total cost divided by the change in total product

Question 22

What are increasing returns to scale?

Answer 22

a percentage increase in all inputs causes a larger percentage increase in output

Question 23

What are constant returns to scale?

Answer 23

A percentage increase in all inputs results in an equal percentage increase in output

Question 24

What are decreasing returns to scale?

Answer 24

A percentage increase in all inputs causes a smaller percentage increase in output

Question 25

what factors cause increasing returns to scale?

Answer 25

The division of labour, specialized capital, or specialized management

Question 26

What factors cause constant returns to scale?

Answer 26

When making more of a product means repeating exactly the same tasks

Question 27

What factors cause decreasing returns to scale?

Answer 27

Management difficulties or limited natural resources

Question 28

What industry has increasing returns to scale?

Answer 28

Manufacturing

Question 29

What industry has constant returns to scale?

Answer 29

Craft

Question 30

What industry has decreasing returns to scale?

Answer 30

Primary

Question 31

Who is Jean Paul Gladu and what did he call for?

Answer 31

An indigenous businesses commentator. He called for re-establishing the constructive aspects of the relationship that once linked indigenous people with the wider Canadian economy. He argues that one way to do this is through procurement commitments by business and government in Canada