Production, division of labour, specialisation and exchange Flashcards
(29 cards)
What is production?
Production is the process of creating goods and services to satisfy human wants.
Define direct production.
Direct production is when an individual produces goods and services only for family use or consumption.
Define indirect production.
Indirect production is when goods and services are produced on a large scale, mainly for sale or exchange.
What are the three groups of indirect production?
- Primary Production
- Secondary Production
- Tertiary Production
What is primary production?
Primary production involves the direct use of natural resources.
Give examples of primary production.
- Farming
- Fishing
- Mining
What is secondary production?
Secondary production refers to turning raw materials into finished goods.
Give examples of secondary production.
- Manufacturing
- Construction
What is tertiary production?
Tertiary production involves the provision of services.
Give examples of tertiary production.
- Teaching
- Banking
- Transportation
What are the factors of production?
- Land
- Labour
- Capital
- Entrepreneur
What is land in the context of factors of production?
Land refers to natural resources used for production, such as soil, water, and minerals.
What is the reward for land?
Rent
What is labour in the context of factors of production?
Labour is the human effort used in production.
What is the reward for labour?
Wages
What is capital in the context of factors of production?
Capital consists of man-made resources used to produce other goods, such as machines and tools.
What is the reward for capital?
Interest
What is an entrepreneur?
An entrepreneur is a person who organises and manages other factors of production.
What is the reward for an entrepreneur?
Profit
What is division of labour?
Division of labour is the breaking down of a production process into different tasks, with each worker focusing on one task.
List advantages of division of labour.
- Faster production
- Higher quality from repeated practice
- Saves time and training costs
List disadvantages of division of labour.
- Boredom from doing the same task
- Over-dependence on others
- Loss of other skills
What is specialisation?
Specialisation is the process where individuals, businesses, or countries concentrate on producing a limited range of goods or services in which they have a comparative advantage.
What are the types of specialisation?
- Specialisation by process
- Specialisation by sex
- Specialisation by product
- Specialisation by geographical or territorial
