Production & Specialisation of Labour

Question 1

What are capital goods?

Answer 1

Goods that are used in the production of other goods or services - e.g., machines, offices, factories

Question 2

What are consumer goods?

Answer 2

Goods or services used by people to satisfy their wants and needs

Question 3

What is the meaning of the word ‘margin’ in economics

Answer 3

The point of change, or the effect of a change by one unit on demand/price/wages/productivity etc.

Question 4

What is the definition of the Production Possibility Frontier

Answer 4

A curve outlining the points of maximum potential

Question 5

Barter

Answer 5

Exchanging of goods and services without the use of a monetary intermediary - also known as DIRECT EXCHANGE

Question 6

What is “capital productivity”?

Answer 6

Output per unit of machines used
E.g., 200 pages per minute photocopier
or
1 hectare per hour for a combine harvester

Question 7

What is a market

Answer 7

Any convenient set of arrangements (a location or online) enabling buyers and sellers to communicate and exchange goods and servces.

Question 8

Describe money

Answer 8

Money is a universally accepted medium of exchange that is used in what we call indirect exchange - I sell eggs for money, with the money I buy clothes.

The four characteristics are, money is:
a medium of exchange
a measure of value
a store of value over time
a method of deferred payment

Historically, peoples converged onto the metals gold and silver as universal monies.

Question 9

What are money substitutes?

Answer 9

Anything that acts for money in the market place such as bank notes (when we could exchange them for gold and silver),

Question 10

Primary sector

Answer 10

Extractive industries - fishing, agriculture, mining

Question 11

Private sector

Answer 11

Property, production, land, etc. owned by private individuals and private companies