Past paper 2023 Flashcards
(16 cards)
What is the name given to a firm that manufactures cars?
Secondary sector firm (manufacturing / processing of raw materials into finished goods).
How do you calculate monthly labour productivity?
Total output / Number of workers.
Example: 27,000 units / 540 workers = 50 units per worker.
What is division of labour?
Breaking production into tasks and assigning them to specialised workers to increase efficiency.
Name one factor of production.
Examples: Land, Labour, Capital, or Enterprise.
What is the public sector?
Part of the economy owned and controlled by the government (e.g. NHS, state schools).
How do you calculate price elasticity of demand (PED)?
PED = % change in quantity demanded / % change in price.
Example: 3.2% / -2.5% = -1.28 (usually absolute value: 1.28, elastic).
What happens when a celebrity wears a product?
Demand for the product rises → demand curve shifts right → price and quantity increase.
Give one reason why a firm may not aim to maximise profit.
To grow market share, improve customer loyalty, or maintain brand image.
Why is knowledge of income and demand useful for firms like Megabus?
Helps predict how demand changes with income changes (negative income elasticity).
Helps adjust pricing, routes, and marketing to keep demand stable.
What is an oligarchy
An oligarchy is a system where a small group holds power.
What factors increase productivity
Technological advancements
Division of labour and specialisation
Economies of scale
Define the term “barriers to entry”.
Obstacles that make it difficult for new firms to enter a market.
Identify two examples of barriers to entry.
High start-up costs
Government regulation and licensing – like needing special permits or compliance to operate in the market.
What is meant by “economies of scale”?
The cost advantages that firms experience when production becomes efficient, leading to lower average costs as output increases.
Explain how economies of scale can act as a barrier to entry.
Large firms can produce at lower costs, making it difficult for smaller new entrants to compete on price.
What is the possible impact of high barriers to entry on market competition?
It reduces competition, allowing existing firms to maintain higher prices and market power.
