Module 7

Question 1

Why would the private + public produce?

Answer 1

Private - to make a point

Public - to provide services that people need and cannot afford

Question 2

Classify industry

Answer 2

1. Primary (extractive industry - forming etc)
2. Secondary (using raw materials to make other goods - furniture,books)
3. Tertiary (providing services - plumber)
4. Quaternary (firms that provide IT services)
5. Interested parties (employees of the firm - job security)
6. Shareholders/Owners (want more profits)
7. Consumers/Buyers (care that what they want is available)
8. Managers (want to know work is being done well)
9. Government (taxes from profits - workers have jobs)
10. Environmentalists (care that the firm is not destroying environment)

Question 3

What is production?

Answer 3

The combination of factors of production

Question 4

What are the methods of production?

Answer 4

Capital intensive (production uses money machines + few workers)
Labour intensive (production uses many workers + few machines)

Question 5

Define the history of production.

Answer 5

The early man was self-sufficient, making what he could of what he needed ,though very limited therefore could not make anything
So he made a surplus, exchanged for another.
(This is called BARTER)
He became independent.

Question 6

What is barter?

Answer 6

Direct swapping of goods without the use of money.

Question 7

What is a double coincidence of wants?

Answer 7

When someone has what you want and you have what they want.

Question 8

What are the advantages of specialisation?

Answer 8

Production is faster
Becomes efficient 
Pay increases
More profits
Prices decrease
Gain market share
Less mistakes 
Economics of scale gained

Question 9

What are the disadvantages of specialisation?

Answer 9

Someone dies - stop in production
Workers get bored
Craftsmanship is lost
Person gets stuck in the job - cannot be replaced

Question 10

Describe the 2 types of specialisation.

Answer 10

By product (workers makes 1 product from start to finish)
By process (worker given part of a job in process)

Question 11

Describe specialisation by country.

Answer 11

Specialise in what they do best
Can sell extra to other countries
Can buy products that don’t do that well
Bad/Good - all counties can enjoy more products - creates independence

Question 12

What’s wrong with barter?

Answer 12

It’s inefficient as people wanted more and more and found it hard to coincide with someone who had what they want and wanted what they had, and were prepared to swap amount having an agreed exchange value. Double coincidence of wants.