SECTION V[Production] Flashcards
(23 cards)
What is the effects of migration?
1.Brain Drain
2.Countries have been forced to change the focus of its economic development
What are the types of capital
- fixed: any form of capital that does not need to change as output changes e.g. Machines
2.variable/working: any form of capital used up in production e.g. natural resources
- venture: money lent to risky businesses
What are the types of production
- subsistence- an amount just sufficient to satisfy the producer.
- domestic-an amount made to meet the country’s needs.
- export/ surplus/cash crop- a quantity that is enough to be sold in other
countries
What are Stages of Production
- primary/extractive- in this stage natural resources are obtained from earth’s
surfaces e.g: drilling, mining, farming, agriculture
2.Secondary-changing extracted natural resources into finished goods e.g.
manufacturing, construction.
3.Tertiary-provision of services to aid the distribution and exchange of finished
goods e.g. transport, communication.
What are some Factors Influencing The Location of Production
1.raw materials- closeness to a supply of inputs
2.market- nearness to buyers and product users
3.labour- an adequate number of workers available
- Infrastructure- proper and reliable utilities e.g. water, electricity
5.climate- weather conditions suitable to grow the crop
- land- large enough to allow for expanded production
- political stability- the area should be approved for the purpose
- government influence- area should be approved for the purpose
- linkages- related businesses including suppliers should be near
What are cottage industries[ handicraft industries]
A small-scale business in which people work in their own homes.
What are some advantages of cottage industries
1.Easy to start( just register business name)
2.Requires little capital ( most are run from one’s home with no rent)
3.Self-employment
4.Source of income
5.Raw materials are easily obtained (local material found in yards are often used)
6.Keeps persons occupied rather than idle
7.Linkage with tourism to earn foreign exchange( tourists that purchase them pay
with foreign currency
What are linkage industries
Industries that are linked with or dependent upon other industries.
What are the types of linkages
1.Backward linkage
2.Forward linkage
What is forward linkage
When the finished products of one industry is used as a raw material to start another industry production
What is backward linkage
when increased demand for the products of one industry leads to the
creation of a new industry to help satisfy its increased demand
What are the benefits of linkages
1.employment
2.Boost productivity
3.Foreign exchange
What are the functions of small businesses
1.Create employment for persons in the economy
2.Provide services larges firms cannot e.g. make products to suit
customers
3.Provide niche markets
4.Provide competition to big business.
What are the disadvantages of small businesses
- Owners may lack expertise
2.Limited financial resources
3.Inability to service customer effectively due to lack of resources
What ways do firms/businesses grow internally
1.Hire more workers
2.Obtain additional capital
3.Acquire new machines
4.Sell new products
What ways do firms/businesses grow externally
1.Merge with other firms
2.Acquire new outlets/branches
3.Engage in joint ventures with other firms
what are the internal economies of scale or the advantages of increased businesses
size.
1.Technical-benefits of using new equipment e.g. faster output
2.Managerial-benefits of hiring mangers e.g. better decisions
3.Financial- benefits-benefits of having greater assets e.g. easier loans
4.Marketing- ability to sell easier e.g. larger target markets
5.Risk-bearing- benefits of selling a wider range of goods
6.Research and Development-ability to create new products easily
7.Social- the ability to improve the firms image through public relations
activities e.g. sponsorship
What are the external economies of scale or the advantages of increased businesses
size.
1.Creates employment.
2.Living standards of employees would improve.
3.Provide niche markets
4.Provide competition to large firms
What are the factors of production
1.Natural resources/Land
2.Human resources/labor
3.Capital
4.Enterprise/Entrepreneurial Talent
What is Enterprise/Entrepreneurial Talent
The organizational ability needed to raise capital, hire labour and bear the risks of production.
What are Factors Affecting The Supply of Labour
Birth rate
Death rate
School leaving age
Level of wages and incentives
Retirement age
External Migration
What are Factors Affecting the Efficiency of Labour
Level of wages and incentives
Health of workers
Working conditions
Training
Knowledge
Experience
What is capital
The resources a company uses to generate revenue and profits
